View full case

DUNCAN ASSOCIATION OF DETAILMAN-PTGWO v. GLAXO WELLCOME PHILIPPINES

FACTS:

Petitioner Pedro A. Tecson entered into a romantic relationship with Bettsy, an employee of Astra Pharmaceuticals (Astra), a competitor of Glaxo Wellcome Philippines, Inc. (Glaxo). Glaxo has a policy that prohibits its employees from having a relationship with or marrying an employee of a competitor company. Tecson signed a contract of employment with Glaxo, which stated that he should disclose any existing or future relationship with co-employees or employees of competing drug companies, and if such a relationship posed a possible conflict of interest, he would have to resign from the company.

Despite being aware of the policy, Tecson married Bettsy in September 1998. In January 1999, Tecson was informed that his marriage to Bettsy created a conflict of interest, and he was asked to resign from his job or have Bettsy resign from hers. Tecson requested more time to comply with the company policy, explaining that Astra was planning to merge with Zeneca, which would eliminate the conflict of interest. He also applied for a transfer within Glaxo to eliminate the potential conflict, but his request was denied.

In November 1999, Tecson was transferred to a different sales area, but he defied the transfer order and continued working in his original sales area. Glaxo enforced its policy by reducing Tecson's pay, excluding him from seminars and training sessions, and prohibiting him from promoting Glaxo products that were in competition with Astra's products. The matter was brought for voluntary arbitration, and the National Conciliation and Mediation Board (NCMB) ruled in favor of Glaxo, affirming the validity of its policy and Tecson's transfer.

Tecson challenged the NCMB decision before the Court of Appeals, which upheld Glaxo's policy, stating that it is a valid exercise of management prerogatives. Tecson filed a motion for reconsideration, which was denied by the Court of Appeals. In his Petition for Review with the Supreme Court, Tecson argued that Glaxo's policy is invalid and that he was constructively dismissed when he was transferred to a new sales territory.

ISSUES:

  1. Whether Glaxo's policy prohibiting its employees from marrying employees of competitor companies is valid and does not violate the equal protection clause of the Constitution.

  2. Whether Tecson was constructively dismissed.

RULING:

  1. The Supreme Court held that Glaxo's policy is a valid exercise of management prerogatives and does not violate the equal protection clause. The policy is aimed at protecting the company's legitimate business interests and guarding against potential conflicts of interest and compromise of trade secrets. The Court found no reversible error in the Court of Appeals' ruling affirming the validity of the policy.

  2. The Supreme Court ruled that Tecson was not constructively dismissed. The transfer from Camarines Norte-Camarines Sur to the Butuan City-Surigao City-Agusan del Sur sales area and his exclusion from certain seminars were legitimate management decisions aimed at resolving the conflict of interest stemming from Tecson's marriage to an employee of a competitor company. There was no demotion, discrimination, or unreasonable treatment that would amount to constructive dismissal.

PRINCIPLES:

  1. Management Prerogative: The right of management to implement company policies to safeguard its business interests, including prohibitions on certain personal relationships that could pose conflicts of interest.

  2. Conflict of Interest: Employees are expected to avoid relationships or activities that could compromise their loyalty and responsibilities to their employer, particularly in highly competitive industries.

  3. Equal Protection Clause: This constitutional guarantee is directed at the state and does not generally apply to private conduct unless there is significant state involvement.

  4. Constructive Dismissal: A situation where an employee is forced to resign due to unreasonable or unbearable working conditions created by the employer; this was not found in Tecson's case as the actions taken by Glaxo were legitimate and considerate of his personal circumstances.

  5. Contractual Commitment: Employees are bound by the terms of employment contracts they knowingly and voluntarily enter into, and such stipulations should be complied with in good faith.