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Local No. 153 v. Trust Co.

Decided: April 1, 1987.


On certification to the Superior Court, Appellate Division.

For affirmance in part, reversal in part -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. Opposed -- None. The opinion of the Court was delivered by Stein, J.


[105 NJ Page 444] This case involves the validity of an arbitration award imposed as the result of a dispute between a bank and one of its tellers. The teller was fired for cashing a forged check. The arbitrator reinstated the employee, and ordered her to reimburse the bank for its loss. The Chancery Division upheld the arbitrator's decision to reinstate the employee, but vacated the reimbursement portion of the award. The Appellate Division affirmed in an unreported opinion. We are of the view that the award was within the scope of the arbitrator's authority. Accordingly, we reverse and reinstate that portion of the award that requires the employee to reimburse the bank for its $3500 loss.


Minnie Pfeuffer was the Head Teller at the Union City branch of the Trust Company of New Jersey. At the time she was fired, she had held that position for sixteen years. She had been an employee of the bank for 38 years, and during that entire period she had never been disciplined.

On September 29, 1984, a busy Saturday morning, a woman entered the bank and approached Pfeuffer's window. The woman identified herself as Mary Cook. She told Pfeuffer that she had just won the lottery and was interested in opening an account with the bank. She also wanted to cash a check for $3500 that named her as payee. Under bank policy, Pfeuffer was required to obtain approval from a bank officer before she could cash a check in this amount drawn on another bank for a non-depositor. Accordingly, Pfeuffer referred the woman to Harold Wrightington, the Branch Manager.

According to Pfeuffer's testimony at the arbitration hearing, she sent Cook to Wrightington's office three times to obtain his approval. Eventually, Wrightington escorted Cook to the teller area and called out "Minnie." Pfeuffer testified that she and Wrightington had developed a shorthand method of approving checks during busy periods. Although the usual procedure was for Wrightington to write "O.K." and his initials on the back of the check, when the bank was crowded, Wrightington would shout out Pfeuffer's first name to signal that he had approved the check. Later on, when the flow of customers had subsided, he would initial the checks that he had approved orally.

When Cook handed the check to Pfeuffer for cashing, Pfeuffer glanced at the back of the check and observed the letters "O.K." She apparently did not turn the check completely over, or consider why there was any notation at all on a check that Wrightington had already approved orally. Pfeuffer cashed the check. She counted out thirty-five $100 bills, as Wrightington stood a few feet away conversing with Cook.

After Cook left the bank, Pfeuffer turned the check completely over and saw that Wrightington's name was written out in full. Pfeuffer asked Wrightington why his full name appeared on the back of the check rather than his initials. He responded that he had neither signed nor approved the check. Wrightington ran outside after Cook, but she was gone.

One week later, the check was returned as uncollectible. The bank suspended Pfeuffer indefinitely. On October 9, 1984, she was fired.

The bank has questioned some crucial aspects of Pfeuffer's story. There is no corroborating evidence of the existence of the shorthand-verbal method of approving checks. There is also no corroboration for Pfeuffer's claim that Wrightington watched her count out the money. Unfortunately, Wrightington died before he could give a statement outlining his version of the events of that day.

Pfeuffer's Union, Local No. 153 of the Office and Professional Employees International Union (hereinafter Union), challenged her termination. It claimed her discharge was not supported by just cause and therefore violated the collective bargaining agreement between the Bank and the Union. The parties submitted the issue for arbitration, certifying the following questions:

Was there just and sufficient cause to terminate Minnie Pfeuffer under the terms of the labor agreement between Local 153, O.P.E.I.U., and the Trust Company of New Jersey? If not, what shall be the remedy?

After a hearing, the arbitrator decided that discharge was too harsh a penalty. He found Pfeuffer's testimony to be honest and straightforward, noting that she had not attempted to minimize her responsibility and had offered to pay back the money. He also cited her long service with the ...

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