                   VICTORY IN THE COLORADO VENDING SUIT 
                              by Marc Maurer 

One of the more disturbing trends evident in Business Enterprise Programs 
in state rehabilitation agencies today is the growing effort to restrict 
the earnings of blind food service operators. Even in states in which 
there are too few trained vendors, agency personnel are quick to divide 
profitable locations into two-, three-, or four-person partnerships 
so that no one vendor will be rewarded for hard work and creativity 
by making an income comparable to that paid to the supervisory staff 
in the rehabilitation agency's vending program.  

The National Federation of the Blind has fought this trend vigorously, 
and we have been able to reach a satisfactory settlement in what is 
perhaps the longest and one of the most disturbing cases of
income-splitting on record. The victory for vendors is important, not only
because one lucrative location has been preserved, but also because the
rehabilitation agency in Colorado has capitulated rather than face having
the case heard before a Federal District Court. In this case, the Randolph-
Sheppard Act has been the vehicle for protecting lucrative locations 
from being divided on the pretext of increasing the opportunities 
available to blind vendors. 

In May of 1986 the vendor who had been managing the facility at the 
Postal Terminal Annex in Denver, Colorado, was due to retire. The 
location, which included vending machines on each of four floors, 
was quite lucrative; and the Colorado Department of Social Services 
decided that in the future it would be divided so that two vendors 
could each service two floors. Although the income to each vendor 
would, of course, have been only about half of what the vending stand 
had been producing for its previous operator, the Colorado agency 
thought that the reduced amount would be enough for the blind. The 
1974 amendments to the Randolph-Sheppard Act require that the state 
vendors' advisory committee participate in the decision-making process 
when a state agency is considering matters of policy. Dividing such 
a location among operators is such a matter of policy. Later events 
demonstrated clearly that the Colorado Department for Social Services 
had already made its decision by the time the issue was mentioned 
to the Blind Vendors Committee, which, not surprisingly, opposed the 
action. The Department went ahead with its plans regardless of vendor 
objections, so Don Hudson and Richard Jack (both Colorado vendors 
with a great deal of seniority and both active members of the National 
Federation of the Blind of Colorado) decided to appeal this decision 
since both of them were interested in bidding on the location.  
The Department of Social Services ruled that they had no right to 
file appeals because its decision had nothing to do with their current 
locations. Hudson and Jack had no choice but to turn to the Federal 
Court to seek an injunction, preventing the Colorado Department of 
Social Services from dividing the location until the dispute was settled. 
In April of 1986 the court issued an order under which the Department 
of Social Services was required to staff the location with a temporary 
vendor until final resolution of the question could be achieved.  
Hudson and Jack won the right to appeal the Department's decision, 
and a full evidentiary hearing was conducted in October, 1986. Not 
surprisingly, the panel, all of whom were employees of the Department 
of Social Services, ruled in favor of the Department, so Hudson and 
Jack requested that the matter go to arbitration.  

Officials took a year to set up the arbitration procedure. James 
Gashel, Director of Governmental Affairs for the National Federation 
of the Blind and an expert on Randolph-Sheppard matters, was named 
by Hudson and Jack to be one of the three panelists appointed to hear 
the case. The Department of Social Services appointed one member, 
and those two agreed upon a third panelist. In January of 1988 the 
panel ruled against Hudson and Jack in a two to one decision. Jim 
Gashel wrote a lengthy dissenting opinion, arguing in part that the 
intent of the 1974 Randolph-Sheppard Amendments was to increase not 
only the number but also the type and quality of food service operations. 
His memorandum, which may be useful to other vendors fighting similar 
cases is reprinted here: 
 
Memorandum 
From: James Gashel 

In the matter of Donald Hudson and Richard Jack
vs.
The Colorado Department of Social Services Case No.--R-S/87-7

This memorandum is prepared to provide analysis of the issues and 
the requirements of the Randolph-Sheppard Act ("the Act") 
as they apply in the above captioned matter. Throughout the following 
discussion Donald Hudson and Richard Jack will be referred to collectively 
as "the vendors."  The Colorado Department of Social Services 
will be referred to as "the state." 
  
The Issue 

The vendors have brought this action to challenge a state decision 
to split an existing vending facility at the Postal Service's Denver 
Terminal Annex "the Annex". The Annex has about 50 vending 
machines and provides the blind vendor with a challenging and financially 
rewarding opportunity. In net income to the vendor alone it is the 
best facility that the Colorado blind vending program has to offer. 
 
The vendors have argued that the state has violated the Act both
substantively and procedurally by attempting to split the Annex. In general
they claim that the Act does not permit the state to take an action that 
would arbitrarily impose an income limit on a blind vendor. They argue 
that the Act is intended to help each blind vendor to achieve "maximum 
vocational potential."  Removing the best facility from the program 
and dividing it into two facilities (according to the vendors) defeats 
the purpose of the Act. 

The vendors' procedural challenge is that the state by-passed the 
committee of blind vendors in deciding on its own to change the policy 
of having only one facility at the Annex. They argue that the vendors' 
committee was merely informed of the state's decision after it was 
already made. By-passing the committee violates the legal responsibility 
of the state to share such decisions (and their making) with the elected 
vendors' committee. Moreover, the vendors cite a no-forced-partnership 
policy, which they say the state and the committee have agreed to 
follow. The policy was intended to prevent partnerships of the type 
that would have to exist at the Annex under the state's split vending 
facility decision. Thus the committee's role was disregarded by the 
state in not sharing the decision making with the committee and by 
violating a prior policy that the state and the committee had agreed 
to. 

The state's position amounts to a denial of these charges. The state 
claims that it has the administrative discretion to establish one, 
two, or more vending facilities at the Annex. According to this reasoning, 
the vendors have no basis for challenging the state's decision. It 
does not place any limit on their income or otherwise affect either 
of them adversely.  

On the other hand, the state claims that it is feasible to split the 
Annex facility into two businesses, each of which will still earn 
a blind vendor a "good income."  The state acknowledges not 
having any particular income guidelines or limits, but the decision 
to split the Annex was not based on the income level, the state says. 
So in general it is the state's basic contention that it had the authority 
to make the decision to split the Annex and that the decision complied 
with the Act and carried out its purposes. 

This is the central question presented to the panel: Does the Act 
permit the state substantially to reduce the size and income potential 
of a vending facility to create an additional facility of the same 
type at the same site?   

Discussion 
  
The Act became law in 1936. At that point it was a very general statute 
providing a preference for the blind in setting up small stands in 
federal buildings. There were amendments to the Act in 1954, but the 
most sweeping and substantive changes occurred in 1974. Those changes 
unmistakably established the policy and the philosophy of the Act. 
Therefore, the underlying legislative history of the 1974 amendments 
is particularly relevant to this discussion.  
  
Policy Direction of the Act 
  
The impetus for the 1974 amendments came from findings of the Congress 
that the Randolph-Sheppard Program had not grown and had not been 
sustained in the manner (or in the spirit) intended. In his statement 
on the floor when the 1974 bill passed the Senate, Senator Randolph 
identified the conditions that were inconsistent with the policy and 
intent of the original Act. One condition was the erosion of the program, 
including the number, type, and size of vending facilities available 
for operation by the blind. A related condition and concern expressed 
by Senator Randolph was the erosion of income for blind vendors.  
Senator Randolph: "It was my belief in 1969 that amendments were 
needed to protect blind vendors and improve the Randolph-Sheppard 
program."  Today... I am more convinced that action is urgently needed. 
We must prevent erosion of the program and erosion of blind vendors' 
income, and improve and expand opportunities for meaningful employment 
of blind individuals. This statement provides the reasoning behind 
each and every provision in the pending measure--prevention of 
the erosion of the program, prevention of the erosion of blind vendors' 
income, and improvement of employment for blind people. Today I am 
more convinced that action is presently needed. We must prevent erosion 
of the program and improve and expand opportunities for meaningful 
employment of blind individuals. That reasoning, which I believe is 
sound, is written into each and every provision of the measure before 
us. We need to prevent the erosion of this effort and to prevent the 
erosion of the blind vendors' income.  "We need, of course, to provide an
opportunity for improvement, and not only improvement in the program and
the facilities, but also improvement in the level of employment of our
blind." 

Floor statements of the other Senators who spoke during the Senate's 
debate on the 1974 amendments to the Act echoed Senator Randolph's 
policy direction to expand opportunities for the blind in the program, 
to prevent erosion of income for blind vendors, and to increase the 
level of employment provided to the blind in the program. These statements 
reveal a deliberate policy direction for the Act that Congress carefully 
described. It is written into "each and every provision."  Accordingly, we
must read and apply the provisions of the Act in light of this clearly
stated purpose. 

At first glance it may appear that the state faces a situation of 
competing policy directions. On the one hand the Act anticipates that 
the number of vending facilities will be increased. On the other hand 
the state must administer the program in a way that protects the program 
and blind vendors against income-eroding conditions. There is no question 
that both objectives must be fulfilled. They are part of the Act's 
policy direction. However, they are not necessarily incompatible. 
Nor is it expected that one objective must be fulfilled at the expense 
of another. 

The Act clearly intends that one or more vending facilities are to 
be established on all federal property. Senate Report 93-937 contains 
one reference to encourage the establishment of more than one vending 
facility on federal property where this is feasible (see Senate Report 
93-937, 93rd Congress, Second Session, The Randolph-Sheppard Act 
Amendments of 1974, June 17, 1974, p. 20). This does not mean, however, 
that the Act favors multiple facilities at single sites when this 
would result in reducing the size and income potential of an existing 
facility.  

The policy of the Act is clearly for the state to do more than simply 
increase the number of facilities. Otherwise the state could place 
5 or 6 vendors at a site and multiply its success rate significantly. 
Doing so would not actually show success as expected by the Act, however. 
There is particular concern that the state is in conflict with the 
Act when the size and income level of a vending facility are reduced 
solely for the purpose of establishing another site. The Act expects 
that as many vending facilities as possible will be established in 
such a way that they do not substantially compete with each other, 
thereby reducing the income potential of the vendors. This expectation 
particularly applies when the establishment of a competing vending 
facility would erode the income potential for a blind vendor at an 
existing facility. 

Reducing the size of a vending facility and reducing its income potential 
are inconsistent with the predominant policy of the Act. To reduce 
the size of a facility (even if the reduction is made to open another 
facility) erodes the growth potential available to some blind vendors. 
The purpose of the Act is to expand (not to erode) business opportunities 
for the blind.  Expansion must occur both quantitatively and qualitatively.
A conflict with this policy direction of the Act occurs whenever a 
quantitative expansion of the program erodes the quality of an existing 
business opportunity. Nowhere in the Act is there even the slightest 
reference to accomplishing expansion of the program by shrinking existing 
opportunities for blind vendors.  

The Act's policy to expand opportunities, to improve income, and to 
increase the level of employment for the blind was expressly directed 
by several of the 1974 substantive amendments. Not one of these amendments 
even encourages expansion of the program by means of reducing the 
size and income potential of existing vending facilities. The amendments 
in fact go precisely in the opposite direction. The emphasis is on 
program expansion by way of opening more facilities in more federal 
buildings (see Senate Report 93-937, pp. 19 and 20). To do this the 
amendments include several clear-cut initiatives.  

Giving blind vendors a statutory priority was seen as one of the most 
far-reaching provisions of the amendments. It was intended particularly 
to curb or reduce competition that resulted in eroding blind vendors' 
income. Congress was using the concept of a priority for blind vendors 
to improve the quality of the vending facilities for the blind as 
well as to increase the number of such facilities. As Senator Randolph 
said: "We need, of course, to provide an opportunity for improvement, 
and not only improvement in the program and the facilities, but also 
improvement in the level of employment of our blind."  

Speaking directly to this point, Senator Dole also said:  "Inevitably, 
competition has arisen for the vending business. And as this competition 
has developed, the blind have faced an erosion of their opportunities.... 
Basically, the bill (S. 2581) establishes a clear-cut and specific 
priority--not merely a preference--for blind vendors. It backs 
up that priority with regulations to insure that the priority is given 
full force and effect." 

The Act requires the Secretary of Health, Education, and Welfare (now 
the Secretary of Education) to "prescribe regulations designed 
to assure that the priority under this subsection is given to such 
licensed blind persons...." (20 USC Section 107(b)). The regulations 
are published at 34 CFR part 395. Section 395.16 is designed to assure 
the priority for the blind at federal sites by means of a "permit" 
including a detailed description of the vending facility, the space 
to be occupied, and the products to be sold. Section 395.33 (not
necessarily relevant here) is designed to assure priority for the blind in
operating cafeterias under "contracts."  The permit or contract for each
vending facility is applied for by the state licensing agency 
and approved by the federal property-managing agency involved.  

These priority and permit requirements are clearly intended to give 
threshold protection to the interests of blind vendors. They are also 
designed to expand the blind vendor program both in the number and 
size of sites available and in their income potential for the blind. 
As Senator Randolph said, they are aimed at expanding the program, 
protecting blind vendors against erosion of their income, and increasing 
the level of their employment. But both the Act and the regulations 
also contain other relevant provisions that are intended to fulfill 
these policy directions.  

For example: "Any limitation on the placement or operation of 
a vending facility based on a finding that such placement or operation 
would adversely affect the interests of the United States shall be 
fully justified in writing to the Secretary, who shall determine whether 
such limitation is justified" (see 20 USC section 107(b)(2) and 
34 CFR section 395.30(b)). This provision clearly gives the Secretary 
the sole statutory responsibility to evaluate and finally approve 
any limitation that may be made to a vending facility that is operated 
under the Act.  

By contrast, section 107a(c) and 34 CFR section 395.31(c) and (d) 
give authority to the state licensing agency (in consultation with 
the head of the affected federal agency) to determine that a satisfactory 
site exists and to decide whether or not to establish a vending facility. 
Furthermore, the state licensing agency then applies for the permit 
under section 395.16, and the federal agency approves or disapproves 
the permit. These sections do not call for or require the Secretary's 
involvement. They pertain to the establishment of the vending facility 
and the specification of the products it may sell. Once established, 
however, the vending facility exists within the terms defined in the 
permit or contract. If the permit or contract is to be limited, it 
appears that the Secretary is to play a pre-eminent role by application 
of 20 USC section 107(b)(2).  

The statutory establishment of an elected state committee of blind 
vendors was also included to prevent the erosion of the blind vendors' 
income. The committee has a specified policy-making role in the statute 
and regulations (see 20 USC section 107b-1(2) and 34 CFR section 395.14). 
Congress intended that the committee should function to represent 
the vendors' interests in matters such as the decision that the state 
made on its own in this case. A decision to split the Annex would 
certainly raise policy issues and affect changes in the state's transfer 
and promotion system, especially for the most senior vendors. The 
plain language of the statute says that such matters may be resolved 
only with the participation of the blind vendors' committee. 
Training, retraining, and upward mobility requirements were also placed 
in the Act to upgrade the level of employment for blind vendors. Under 
the amendments of 1974 each blind vendor is actually entitled to follow-up 
and follow-along services from the state in order to achieve the maximum 
vocational potential (see 20 USC section 107d-4 and 34 CFR section 
395.11). Program and income expansion were also to be accomplished by
providing a broader definition of "vending facility" (discarding the
concept of a "vending stand"), by provisions for paying vending machine
income to blind vendors, and by arbitration and judicial review safeguards.

These are among the many requirements that Congress included to prevent 
the erosion of the program and the erosion of blind vendors' income. 
As with all of the other provisions aimed at reversing these erosions 
that Congress found, these requirements are more than procedural niceties. 
This quick review of the Act and its 1974 amendments shows the integral 
relationship between each specific requirement and the overall policy 
direction that Senator Randolph identified--preventing the erosion 
of the program, preventing the erosion of blind vendors' income, and 
increasing the level of employment of blind people. As he said: "This 
is written into each and every provision." Therefore anything 
that is done under the Act must not conflict with the fulfillment 
of these objectives. Moreover, this policy direction specifically 
excludes accomplishing these objectives by reducing the size and income 
potential of existing vending facilities to create additional facilities 
of the same type at the same site.  

The state is required to pursue the programmatic objectives without 
eroding the income available (or potentially available) to blind vendors. 
Congress considered the question of the types of limits (if any) that 
could be placed on opportunities and income to the blind, and a deliberate 
choice was made. The law, therefore, permits income limits to occur 
under only two conditions or circumstances. The first is by permitting 
"set aside" charges against the net proceeds of a vendor in 
order to achieve certain very specific programmatic objectives. These 
are essentially for program maintenance and for vendor benefits (see 
20 USC section 107b(3) and 34 CFR section 395.9). These provisions 
are clearly not aimed at reducing the size of vending facilities but 
rather are intended to support ongoing program operations.  
The second limitation is a ceiling that may be imposed on any vendor's 
receipt of "vending machine income." The income in question 
is from vending machines that the vendor does not operate, service, 
or maintain. Payments of such income to a vendor are made to compensate 
the vendor for competition from the vending machines. But the Act 
specifically says that "no limitation shall be imposed on income 
from vending machines, combined to create a vending facility, which 
are maintained, serviced, or operated by a blind licensee" (see 
20 USC section 107d-3(a) and 34 CFR section 395.8(a)).  

These limitations on blind vendor income are very deliberate and very 
carefully prescribed. The fact that they exist at all shows that Congress 
considered the question of limiting vendor income and chose only two 
methods or circumstances for doing it--by means of a set aside 
to support program operations and for vendor benefits; and by way 
of a ceiling on income from machines that the vendor does not operate. 
Neither limitation permits the actual reduction in size of a vending 
facility in order to accommodate the placement of another blind vendor. 
That is the type of limit that Congress did not legislate, although 
it could have done so. This review of the Act shows that the failure 
was not accidental.  
  
Analysis 
  
The priority for the vending facility at the Annex is implemented 
by a specific permit. The permit describes a single site. The state's 
plan to split the site has included a request to the Postal Service 
for issuance of two permits for separate vending facilities at the 
Annex. The current permit expresses the value of the priority for 
a blind vendor at the Annex. It describes the size and scope of the 
operation. The permit was negotiated on behalf of the blind vendors 
who are intended to become its beneficiaries. 

The Annex facility under the single permit is at the top of the promotion 
ladder in the program. In splitting the facility the state would be 
decreasing the income value of the promotion potential for the vendors. 
The Annex facilities created by virtue of the split would no longer 
be the best. Therefore, the income possibilities that either of the 
vendors could realize by promotion would be eroded. Such an erosion 
is in conflict with the Act's policy direction--to prevent erosion 
of the program, to expand opportunities for blind vendors, and to 
increase the level of employment for the blind provided by the program. 
 
This is not to say that the establishment of more than one vending 
facility at any particular site will always violate the policy of 
the Act. In fact, the state already has one existing site where more 
than one vending facility is operated. But these facilities are not 
of the same type--one is a snack bar and the other is a dry stand.  There 
is also evidence that the vendors and the state agree on continuing 
to have a vending machine operation conducted by one blind vendor 
at the Annex and adding a separate cafeteria operation to be conducted 
by another blind vendor. These situations are certainly permissible 
under the Act. But when the state substantially reduces the size and 
income potential of an existing vending facility merely to create 
another facility, there is an inevitable and impermissible erosion 
of the level of income that either of the vendors can obtain. 
Under the Act the state and the Postal Service appear to have broad 
authority to determine the exact size and scope of the vending facility 
at the Annex (see 20 USC section 107a(c) and 34 CFR section 395.30). 
That authority was exercised when the permit was negotiated in 1981. 
Once established at a certain level, however, the vending facility 
may not be reduced in size or income potential if the reduction is 
within the control of the parties to the permit. The Act does not 
allow them to erode the opportunity provided by the vending facility. 
The value of the priority to be given to the blind under 20 USC section 
107(b) is diminished if the vending facility is eroded, and therefore 
the Act is violated.  

Section 107(b) does anticipate that circumstances may arise which 
justify placing a limitation on the vending facility. The limitation 
can be approved if the placement or operation of a vending facility 
adversely affects the interests of the United States. A limitation 
that is merely the erosion of an existing vending facility opportunity 
(as in the case of the Annex) would presumably not be justifiable 
under 20 USC section 107(b)(2). In any case the decision to approve 
or disapprove the limitation does not rest with the state or the Postal 
Service. Only the Secretary of Education can approve the limitation. 
This safeguard for the vendors was included in the Act to protect 
them against erosion of opportunities and income (see Senate Report 
93-937, pp. 16 and 17). If the state unilaterally attempts to impose 
a limitation on the placement or operation of a vending facility (as 
in the present instance), it has acted in violation of section 107(b)(2) 
and 34 CFR section 395.30(b).  

By its actions in the past the state has acknowledged that the vendors 
have an interest in the priority and the permit at the Annex. In 1981 
the state decided to negotiate a single permit for the Annex rather 
than splitting the business among three vendors to operate under three 
permits, as the Postal Service wanted. The state's 1981 decision resulted 
from a deliberate policy choice, including the fact that the state's 
Director of Business Enterprises was "overruled." But in 1986 
the Director's original position was adopted by the state prior to 
informing the vendors. The Director of Business Enterprises acknowledged 
that the 1986 decision represented a change from the state's previous 
practice of having a single vendor at the Annex. 

The permit expresses the level and value of the priority for a blind 
vendor that now exists at the Annex. It is undisputed that one of 
the vendors in this action would be awarded the priority to operate 
the vending machines at the Annex if the state solicited bids for 
the promotion from all of the vendors in the usual manner. But the 
state did not do this. The state instead proceeded to implement its 
decision to split the priority. This caused an erosion of income that 
one of the vendors would have obtained under a promotion. Therefore, 
the state's action is a clear contravention of the policy direction 
of the Act. 

The state's action was also a contravention of its own site selection 
policy. That policy with respect to the Annex is specifically expressed 
in the existing permit for a single site. The decision to have a single 
site at the Annex resulted from a deliberative exercise, which involved 
the vendors' representative committee. The Annex policy was not reached 
by accident. Once it was established (especially with involvement 
of the vendors' committee), everyone should be able to rely upon the 
state to honor the policy or to seek a change through a similar
deliberative process involving the committee. In the case before us,
however, the state neither honored the policy in effect at the Annex nor
sought the committee's deliberative involvement in approving a
modification. 

Thus, the state violated its own policy expressed in the permit and 
further violated the Act's requirement for vendors' committee
participation. 
 
  
Findings And Conclusions 
  
(1) The arbitration panel has jurisdiction to hear this matter under 
20 USC section 107d-1(a) and section 107d-2.  

(2) The vendors have standing to bring this action as blind licensees 
under the Act. 

(3) The state and the Postal Service have established a single vending 
facility to be operated by a single blind vendor at the Postal Service's 
Denver Terminal Annex. The existence of the vending facility and its 
size and scope are secured by and described in a permit that was lawfully 
executed by the parties. The permit was negotiated on behalf of the 
vendors who are intended to be its beneficiaries. 

(4) The permit establishes and describes the implementation of the 
priority given to blind vendors under 20 USC section 107(b). The state's 
decision to negotiate and agree to a single permit for the Annex was 
a policy choice involving a resolution of contending views of the 
Postal Service, the state's Director of Business Enterprises, the 
vendors' committee, and other supervising officials of the program. 

(5) The Annex facility under the existing permit offers the assigned 
blind vendor the best promotional opportunity in the state. It is 
the largest business in the program, considering both its size and 
income potential. The state's plan to split the facility would erode 
both the size and the income potential that now exist at this site. 
 
(6) The clear policy direction of the Act is to prevent erosion of 
the program, to expand opportunities for the blind (both qualitatively 
and quantitatively), to prevent erosion of the income of the blind, 
and to increase the level of employment of the blind. This direction 
provides the rationale for giving a priority to a blind vendor under 
the existing permit at the Annex. Therefore, relinquishing the permit 
and dividing the facility as desired by the state is an unlawful erosion 
of opportunities and income and a violation of the priority established 
in 20 USC section 107(b).  

(7) The state and the Postal Service properly negotiated a permit 
for the Annex and deliberately elected to develop this location as 
a single vendor site. 20 USC section 107(b)(2) is designed to protect 
blind vendors against actions to reduce or limit the priority given 
to a vending facility. Such actions can only be justified if the proposed 
placement or operation of a vending facility adversely affects the 
interests of the United States. When it does, the Secretary of Education 
is empowered to approve a limitation. Neither the state nor the Postal 
Service can unilaterally determine that a limitation on the placement 
or operation of the existing vending facility at the Annex is justified. 
Therefore, the state's decision to split the existing vending facility 
was a violation of 20 USC section 107(b)(2).  

There was no finding that the interests of the United States were 
or are adversely affected by the existing vending facility. Also the 
question was never submitted to the Secretary, and the state did not 
have the authority unilaterally to impose the limitation. 

(8) By practice and design the agency has a policy of not operating 
two vending facilities of the same type at the same site. This policy 
was followed when the Annex facility was established as a single vendor 
location. The state's plan to split the facility would result in two 
roughly identical vending machine operations serving customers in 
the same building. This would cause at least some competition between 
the facilities and the vendors. Having such an arrangement is a violation 
of the state's policy with respect to the Annex (which policy is expressed 
in the present permit) and a violation of the state's overall programmatic 
policy not to establish two facilities of the same type at the same 
site.  

(9) The state decided to change its policy with respect to the Annex 
facility prior to informing the vendors' committee of the decision. 
20 USC 107b-1(2) requires participation by the committee in making 
such decisions. Therefore the state's exclusion of the committee in 
this instance violated the Act. 
  
That is what Jim Gashel filed with the chairman of the arbitration 
panel to assist in establishing the record and to create the best 
possible climate for appeal. In March, 1988, therefore, Hudson and 
Jack (in consultation with the National Federation of the Blind) decided 
to take their case back to the same federal court which had granted 
the injunction almost two years before. Briefs were eventually written 
and submitted by both sides, and then there was nothing to do but 
wait for a decision to be rendered.   

Tragically, in September of 1989, while things were still hanging 
fire, Richard Jack was struck by a car and killed. At the time of 
his death, Richard was serving as president of the Vendors Chapter 
of the NFB of Colorado. For some years he had also been the treasurer 
of the Colorado affiliate, and he was always a quiet but rock-solid 
leader of the movement. On the evening of his death Don Hudson, his 
friend and colleague, summed up everyone's feeling when he said that 
in Richard "we have lost a warrior in the movement."  

The court case wound on for five more months. Then in February, 1990, 
the Department of Social Services decided it had had enough. It seems 
a safe conclusion that officials feared that they were going to lose 
the case. Apparently agency officials thought they could do better 
with a settlement because it would avoid a binding court decision 
that could be used in the future by other vendors. On February 23, 
1990, therefore, Judge James Carrigan announced the settlement with 
prejudice, which means that neither party may bring this matter before 
the court again. The language of the settlement was worked out by 
the lawyers for the two parties and approved by the court, which
incorporated it in a court order. Not only does the settlement spell out
the guidelines under which the agency can make decisions to divide food
service locations in the future, but it also allows for payment of the
NFB's legal fees out of the profits of the Postal Annex location that have
accrued since May of 1986 when the temporary vendor took over the location.

The Blind Vendors Committee and the vendors of Colorado have voted 
to this agreement. Here is the text of the settlement: 
 
                IN THE UNITED STATES DISTRICT COURT FOR THE
                          DISTRICT OF COLORADO  
  
                         Civil Action No. 86-C-754
                           (Formerly 86-K-754) 
  
               DON HUDSON, RICHARD JACK (deceased), and the 
                   COLORADO COMMITTEE OF BLIND VENDORS, 
                               Plaintiffs, 
                                    v. 
                            COLORADO DEPARTMENT
                          OF SOCIAL SERVICES and 
                         UNITED STATES DEPARTMENT
                              OF EDUCATION, 
                               Defendants. 
 
ORDER AND JUDGMENT 
 
THE COURT, having read the Stipulation for Settlement and being fully 
advised in the premises, hereby ORDERS:  

1. The claims of the plaintiffs are dismissed with prejudice against 
the Colorado Department of Social Services and United States Department 
of Education.  

2. This matter is herewith dismissed with prejudice, each party to 
pay their costs and attorney fees as set forth herein.  

3. That certain Arbitration Order entered on December 14, 1987, and 
the matter referred to as Hudson v. Colorado Department of Social 
Services, R-S/87-7, is herewith vacated.  

4. The United States Postal Terminal Annex Blind Vendors Facility, 
which is the subject of this litigation, shall not, hereafter, be 
divided into separate vending facilities, except in accordance with 
paragraph 7 below.  

5. The United States Postal General Mail Facility (GMF) presently 
under construction in Commerce City, Colorado, shall be operated hereafter 
as a single vendor facility, unless divided pursuant to paragraph 
7 below.  

6. A two-thirds majority of blind vendors, voting at a duly noticed 
meeting, having approved the stipulation, the funds escrowed by the 
State Licensing Agency (SLA) from the program operation of the Terminal 
Annex vending facility on Wyncoop Street shall be distributed pro 
rata to the blind vendors less the attorney fees incurred by the Plaintiffs
and/or paid on their behalf by the National Federation of the Blind, 
Headquarters, Baltimore, Maryland.  

7. The SLA and the Blind Vendors Committee shall create new binding 
Business Enterprise Program Guidelines for the establishment of policies 
regarding the later division of blind vendor facilities. Such regulations 
shall provide that:  

a. In the event the SLA or the Blind Vendors Committee desires 
to change the nature or level of service of a vending facility, 
an economic analysis shall be undertaken at the expense of the SLA 
but under the joint participation of the Blind Vendors Committee and 
the SLA which shall include consideration of, but not be limited to: 
 
(1) Architecture and physical structure;  
(2) Profitability; 
(3) Best utilization of agency resources;  
(4) Opportunity for advancement and rehabilitation; 
(5) Demand for new locations for trainees.  
  
a. At the conclusion of said economic analysis, the SLA shall allow 
sixty (60) days for notice and comment to the Blind Vendors Committee 
and then to the body of blind vendors for further input, to be taken 
into consideration in its final written decision. 

b. The income, to be generated by any proposed facility were 
it to be operated as a single operator facility, shall not in and 
of itself be a criterion for division of any proposed facility.  

c. A location operated by a single operator may not be divided 
except upon the transfer or retirement of the single operator under 
existing guidelines of the State Licensing Agency.
 
There you have it. The settlement is a clear victory for blind vendors 
in Colorado and a ray of hope for everyone working in food service 
across the country. The Terminal Annex in Denver will remain a one-operator
facility, and the new Postal Annex location in Commerce City will 
not be split either. More to the point, the state agency is unlikely 
to attempt to sidestep the Randolph-Sheppard amendments in the same 
way. These were the goals that Don Hudson and Richard Jack had in 
mind when they challenged the system in 1986. But such efforts always 
exact a cost. 

The Colorado Business Enterprise Program recently awarded the Postal 
Annex vending facility, and Don Hudson was not the recipient. He is, 
of course, not the agency's favorite vendor, but he is the one they 
turn to for training new people and the man they send in when other 
locations are in trouble. There are indications that the award was 
made in return for political favors, but at this writing (mid-March) 
it is too early to know what will happen. There may be another appeal a 
second Hudson case.  Recriminations taken against one vendor for exercising
the statutory right of appeal cannot be tolerated.  How often has 
it been true that agency officials believe they can do as they please 
without regard to the law, fairness, or decent standards of behavior?  But 
what they have failed to consider is the National Federation of the 
Blind. It is, as it has been for fifty years, the National Federation 
of the Blind leading the fight as we demand the right to work and 
earn on terms of equality. The Colorado vending case is just one more 
indication of why the National Federation of the Blind must and will 
continue to fight for the rights of blind people. 
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