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.