FACTS:

The case involves the dispute between the petitioner, Rolando C. Rivera, and Solidbank Corporation. Solidbank offered a retirement program to its employees, including the petitioner, who eventually retired under the Special Retirement Program (SRP) and received retirement benefits. As a condition for receiving the benefits, the petitioner signed an Undertaking that included an employment ban preventing him from working for a competitor bank or financial institution for one year. However, the petitioner obtained employment with Equitable Bank before the expiration of the employment ban. Solidbank filed a complaint against the petitioner for the return of the retirement benefits he received, claiming that his employment with Equitable violated the Undertaking. The trial court rendered a summary judgment in favor of Solidbank, ordering the petitioner to return the retirement benefits. The petitioner filed an appeal to the Court of Appeals (CA), which partially granted the appeal by setting aside the attachment made on the petitioner's family home but upheld the ruling regarding the return of the retirement benefits. The petitioner then filed a petition for review with the Supreme Court.

The petitioner argues that there are genuine issues of fact in the case, including the circumstances surrounding the offer of retirement benefits and the petitioner's acceptance and signing of the Undertaking. The petitioner contends that evidence is necessary to determine the necessity of the employment ban and its impact on the petitioner's right to earn a living. The petitioner also argues that the burden is on the respondent to prove damages resulting from the alleged breach of the employment ban. Additionally, the petitioner claims that the provisions in the Undertaking, such as the prohibition on engaging in unlawful activity and disclosing bank information, as well as the employment ban, are oppressive and unreasonable. The petitioner argues that the Undertaking deprives him of the means to support his family and his children's future. The petitioner further asserts that the respondent's management prerogative does not justify preventing employees from seeking employment in competing banks or financial institutions. Lastly, the petitioner argues that the retirement benefits received were valuable consideration for his early retirement, which facilitated the respondent's reorganization plan.

ISSUES:

1. Whether the employment ban contained in the Undertaking is oppressive, unreasonable, and against public policy.

2. Whether the retirement benefit received by the petitioner should be returned to the respondent bank.

3. Whether the petitioner should be subjected to pay 12% interest per annum on the retirement pay.

4. Whether there is a genuine issue of fact as to whether the post-retirement competitive employment ban incorporated in the Undertaking is against public policy.

5. Whether summary judgment is appropriate in this case.

6. Whether the post-retirement competitive employment ban is valid and enforceable.

7. Whether the prohibition against petitioner accepting employment with a competitor bank or financial institution within one year is reasonable.

8. Whether the post-retirement competitive employment ban is reasonable or unreasonable.

9. Whether the waiver or estoppel bar the employee from challenging the ban.

10. Whether the post-retirement competitive employment ban in the Undertaking is valid and enforceable.

RULING:

1. The petition is meritorious. The employment ban contained in the Undertaking is oppressive and against public policy. The retirement benefit received by the petitioner should not be returned to the respondent bank. The petitioner should not be subjected to pay 12% interest per annum on the retirement pay.

2. Yes, there is a genuine issue of fact as to whether the post-retirement competitive employment ban is against public policy. The issue requires the parties to present evidence to support their respective claims.

3. Summary judgment is not appropriate in this case as there is a genuine issue of fact that needs to be resolved through the presentation of evidence.

4. The rulings of the trial court and the appellate court are incorrect. There is no factual basis for the trial court's ruling as it rendered summary judgment without allowing the presentation of evidence on the reasonableness of the restrictive covenant. On the face of the Undertaking, the post-retirement competitive employment ban is deemed unreasonable as it lacks geographical limits. Additionally, the matter of whether the restriction is reasonable or not should be determined based on the circumstances of the case.

5. The court held that the reasonableness of the post-retirement competitive employment ban cannot be determined solely from the terms and conditions of the Undertaking or in tandem with the Release, Waiver and Quitclaim.

6. The court ruled that the employee is not barred from challenging the post-retirement competitive employment ban by waiver or estoppel. Contracts that are contrary to law, morals, good customs, public order or public policy are void from the beginning, and estoppel cannot give validity to an act that is prohibited by law or against public policy.

7. The court ruled that the post-retirement competitive employment ban in the Undertaking is not automatically enforceable and does not entail the automatic forfeiture of retirement benefits. The employer must still prove its entitlement to damages and restitution. The case was remanded to the trial court for further proceedings.

PRINCIPLES:

• Management prerogative must not abuse the rights of employees and should at least inform employees of its decision or modes of action.

• Courts have no power to relieve parties of obligations voluntarily entered into, simply because their contracts turned out to be disastrous.

• For a summary judgment to be proper, there must be no genuine issue as to any material fact, except for the amount of damages, and the party presenting the motion must be entitled to a judgment as a matter of law.

• A genuine issue of fact requires the presentation of evidence and cannot be a sham, fictitious, contrived, or a false claim.

• When there are disputed material facts, proceedings for summary judgment cannot take the place of a trial.

• Conclusory assertions, mere speculations, and unsupported contentions are insufficient to raise an issue of material fact.

• A party must come forward with specific facts in support of a claim and cannot rely solely on allegations.

• The determination of whether a party breached a contract is a question of law when there are no disputed material facts.

• Summary judgment may be appropriate even if ambiguity exists in a contract if the extrinsic evidence presented supports only one interpretation.

• Article 1306 of the New Civil Code provides that the contracting parties may establish stipulations, clauses, terms, and conditions as they deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. The freedom of contract is both a constitutional and statutory right.

• Courts have no jurisdiction to look into the wisdom of a contract and can only enforce it as long as it is not contrary to law, morals, good customs, and against public policy.

• Retirement plans must be liberally construed in favor of the employee as they are intended to provide support and reward the loyalty of the employee.

• Public policy is the principle that restricts freedom of contract or private dealing for the good of the public. The nature of the subject matter determines the source from which the question of whether a contract is contrary to public policy is to be solved.

• "Trade" refers to any occupation or business carried on for subsistence or profit and is not limited to commerce and traffic.

• Contracts whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy are void from the beginning.

• Contracts in restraint of trade are to be judged according to their circumstances, considering the injury to the public and to the party himself.

• Employers have the burden to establish that a restrictive covenant is not unreasonable or oppressive and is not an undue or unreasonable restraint of trade.

• Contracts limiting a person's natural right to follow any trade or profession should be carefully scrutinized, but the right to protect what one has built up through industry, skill, and good judgment should not be unreasonably denied.

• The reasonableness of a restraint in a contract depends on the particular facts and circumstances of each case, including the legitimate interests of the employer, the extent of the restraint, and its impact on the employee and the public.

• Consideration must be given to the employee's right to earn a living and the territorial limitations should be reasonable and co-extensive with the employer's business.

• The banking business, being of public interest, requires a high level of diligence.

• Forfeitures for engaging in subsequent competitive employment included in pension and retirement plans are generally valid, even if unrestricted in time or geography.

• A post-retirement competitive employment ban in an undertaking is not automatically enforceable and does not entail the automatic forfeiture of retirement benefits. The employer must still prove its entitlement to damages and restitution.

• Actual damages in breach of contract cases must be proven through competent proof and the best evidence obtainable. The injured party cannot rely on mere assertions, speculations, conjectures, or guesswork.