Braille Monitor                                                                                February 1986

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Arizona Squares Off with the Postal Service: Arizona Wins

by James Gashel

When we speak of arbitrations under the Randolph-Sheppard Act, we are usually talking about matters which involve disputes between blind vendors and the state agency for the blind. Technically, those are known as arbitrations under Sections 5(a) and 6 of the Randolph-Sheppard Act. But there is also another type of arbitration.

The second type is an arbitration which may or may not involve a specific blind vendor. Whether it does or not, the blind vendor (if there is one involved in the dispute) is not a party. The dispute in this second variety of arbitration is between a state agency for the blind and a federal property managing agency. This proceeding is authorized under Sections 5(b) and 6 of the Randolph-Sheppard Act. So it isn't only blind vendors who may file complaints under the Randolph-Sheppard Act. State agencies, too, may file them and have an arbitration to resolve their dissatisfaction with what federal agencies are up to.

Several states have used the arbitration mechanism to contest the actions of federal property managing agencies, particularly the Department of Defense and the United States Postal Service. Arizona is the most recent state to bring a federal agency before an arbitration panel. I served on that panel.

It is not generally our business to go around representing state agencies. But when the goals of the agencies and the goals of the blind are in harmony, we can certainly team up to work as partners, and we do. We will not, however, compromise our goals simply to sing the song of the agencies. In the Arizona case, there was nothing like that which we had to be concerned with. The Arizona agency came to us because the blind vendors of Arizona told the state officials that the NFB would provide them better representation on an arbitration panel than anyone else could. The issue involving the Postal Service was one we were interested in, so President Jernigan agreed that we would work with Arizona and that I should serve as the state agency's designee on the three member arbitration panel.

The state vs. federal arbitration is very similar to a vendor vs. state arbitration. There is a three-member panel--one member of the state's choice (in this case I was that person); one member of the federal agency's choice (in this case Mr. W. Allen Sanders, Associate General Counsel for the United States Postal Service); and one neutral, third-party member (the chairman of the panel) chosen by the other two designees. For this case Mr. Sanders and I selected a lawyer (Donald Daughton) from Phoenix. Mr. Daughton is a professional arbitrator.

On Tuesday, November 5, we met in a conference room of the new main post office in Phoenix, Arizona. The vending services in this building were, in fact, at the center of the dispute. From the very beginning of the session, it was clear that the representatives of the Postal Service had actually come to talk settlement. They did not want a fullblown arbitration hearing. But the Arizona state agency had nothing to lose by a hearing, so the settlement terms would be high.

The nature of the dispute was this: In August of 1985 the United States Postal Service had opened a new "General Mail Facility" (what used to be called a main post office) in Phoenix. It is a large building having over 500,000 square feet interior floor space, mostly on one level. The workroom, where all of the mail is processed, takes up over 300,000 square feet of the building. There are seven vending machine locations at various points around the perimeter of the workroom floor, each with three vending machines, for a total of twenty-one machines at those sites. There is one bank of vending machines having five additional machines, located roughly in the middle of the workroom area itself. There is also another bank of five vending machines serving the administrative offices only.

So in all there are thirty-one vending machines separated into nine locations throughout the building. Mostly they serve snack items and beverages, both hot and cold. None of these machines are being operated by a blind vendor. All are under contract to the Servomation Company. That was the crux of the issue. Priority had not been given to the blind.

The Postal Service argued that there was no obligation to offer a priority for a blind vendor to operate the vending machines since the cafeteria in the new building had already been granted to the blind vending program under a contract. In fact, it had. It is a large cafeteria, managed by a blind vendor. He is open for business twenty-four hours a day, seven days a week, with a regular hot food serving line, twenty one vending machines, and a large seating area. As with twenty-six out of the thirty-one other vending machines already mentioned, the cafeteria, too, is situated immediately adjacent to the workroom floor. It is prime space, serving a clientele of approximately 3,000 postal service employees. In addition, the Postal Service had offered to give the blind vending program a small stand location in the public lobby. Given the sparse traffic flow in the lobby, however, it was unlikely that any business would be viable in that location. Besides, postal customers would not generally come to the post office to buy soda pop, candy, and gum.

So the real issue came back to the vending machines. The Arizona state agency argued that the Randolph-Sheppard priority also applies to the vending machines and is not satisfied merely by awarding a single cafeteria contract, no matter how lucrative the business might be. Reading the Randolph-Sheppard Act, it says: "Wherever feasible, one or more vending facilities are established on all federal property..." (emphasis added). Further the act also states that "in authorizing the operation of vending facilities on federal property, priority shall be given to blind persons licensed by a state agency as provided in this act. ..

" Those requirements ought to suggest that a priority for the blind clearly exists and that it applies to not just one but also more than one vending facility which may be located on federal property. Anyway, that's what this arbitration was all about.

But the air of settlement was in the wind. Apparently the Postal Service felt unsure about its position that only one vending facility had to be granted a priority. There were various settlement offers placed on the table that day, November 5, but a deal was finally struck at the conclusion of a roughly ten-hour bargaining session. The terms (soon to be published in the Federal Register) are these:

(1) The cafeteria contract will be altered so that its current five-year term becomes "indefinite." This means that the contract never expires unless the state agency for the blind and the Postal Service agree to its expiration. There will never be any competition with commercial food service firms for this particular cafeteria. It will remain with Arizona's vending facilities program for the blind for as long as blind vendors want to operate this business.

(2) A contract provision for the cafeteria, requiring the blind vendor to pay a portion of the gross sales to the Postal Service is eliminated. The rationale for this charge was to cover utility costs of the cafeteria. However, the policy under the Randolph Sheppard program is normally to provide free space. So that will be done in this case. The cafeteria contract will have an indefinite life with free space.

(3) The blind vendor operating the cafeteria will receive 40% of the vending machine income from the thirty-one vending machines now operated by the Servomation Company. Section 7 of the Randolph-Sheppard Act requires that the blind vendor must be paid 30% of this vending machine income, but this agreement adds an additional 10% for the vendor.

(4) It is understood that the Arizona State Agency for the Blind may at any time ask the Postal Service for a permit to allow the blind vendor to add the thirty-one vending machines to the existing cafeteria business or to operate them in some other way. It is also understood that the Postal Service will respond within six months to any applications submitted by the state to take over these vending machines. However, it is also understood that if approved by the Postal Service, the state's application for a permit to take over the vending machines would not become effective until August, 1988, allowing the current vending contract with Servomation to run its course. If the Postal Service approves the permit for a blind vendor to take over the operation of the vending machines, the dispute would be at an end. However, if the Postal Service disapproves the permit (which is more likely), the Arizona state agency would be free to request an arbitration over that issue, even if the arbitration occurs sooner than August of 1988. Those are the settlement terms. In short, this arbitration resulted in a new cafeteria contract, locking in that facility under the Randolph-Sheppard program indefinitely with free space. In addition, the blind vendor is awarded 40% of the vending machine income as opposed to 30% which the law provides for the vendor to receive from most of the competing vending machines. Finally, the real issue of the arbitration (who has the priority on the competing vending machines) is not settled at all. If the state of Arizona makes an immediate request for a permit for a blind vendor to take over the competing vending machines, a new arbitration over that question could be convened in about six months, shortly after the Postal Service gives its decision to decline the permit. Otherwise, maybe (just maybe) the Postal Service will actually see the light and eventually approve a permit for a blind vendor to operate all of the vending machines in the Phoenix General Mail Facility.

Meanwhile, we have concessions from the Postal Service and another big victory for blind vendors. As I have said, the outcome of this case will soon be published in the Federal Register. As you might imagine, the Postal Service was worried about that. The representatives of the Postal Service were uncomfortable with the fact that other state agencies and blind vendors might learn of the results of the Arizona complaint, and there would be pressure for similar agreements in other parts of the country. I assured the representatives that whether the decision is published in the Federal Register or not (and the Randolph-Sheppard Act requires all of these decisions to be published), the National Federation of the Blind would certainly publicize the decision so that all state agencies and blind vendors could read about it. These arbitrations are not (and we are determined that they shall not be) a matter of secrecy. They are held in public, and their decisions are a matter of public record. That is as it should be. But for now, a victory, and for later, another bite at the apple. That is the outcome in Arizona. And once again, the National Federation of the Blind was on the cutting edge, working to improve opportunities for blind vendors--and by so doing, for all of the blind.

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