DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A.
TECSON, Petitioners, vs. GLAXO WELLCOME PHILIPPINES,
INC., Respondent.
G.R. No. 162994 September 17, 2004
TINGA, J.:
TOPICS: Validity of a company policy prohibiting its employees from marrying
employees of any competitor company; Constructive dismissal.
FACTS:
This is a Petition for Review on Certiorari assailing the Decision and
the Resolution of the Court of Appeals.
Petitioner Pedro Tecson was hired by respondent Glaxo Wellcome
Philippines, Inc. as medical representative. Tecson signed a contract of
employment which stipulates that he agrees to study and abide by existing
company rules; to disclose to management any existing or future relationship by
consanguinity or affinity with co-employees or employees of competing drug
companies and should management find that such relationship poses a possible
conflict of interest, to resign from the company. The Employee Code of Conduct
of Glaxo similarly provides that an employee is expected to inform management
of any existing or future relationship by consanguinity or affinity with co-
employees or employees of competing drug companies. If management perceives
a conflict of interest or a potential conflict between such relationship and the
employee’s employment with the company, the management and the employee
will explore the possibility of a transfer to another department in a non-
counterchecking position or preparation for employment outside the company
after six months.
Tecson was initially assigned to market Glaxo’s products in the Camarines
Sur-Camarines Norte sales area. Subsequently, Tecson entered into a romantic
relationship with Bettsy, an employee of Astra Pharmaceuticals, a competitor of
Glaxo. Bettsy was Astra’s Branch Coordinator in Albay. She supervised the
district managers and medical representatives of her company and prepared
marketing strategies for Astra in that area. Even before they got married, Tecson
received several reminders from his District Manager regarding the conflict of
interest which his relationship with Bettsy might engender. Still, love prevailed,
and Tecson married Bettsy.
Tecson’s superiors informed him that his marriage to Bettsy gave rise to a
conflict of interest. Tecson’s superiors reminded him that he and Bettsy should
decide which one of them would resign from their jobs, although they told him
that they wanted to retain him as much as possible because he was performing
his job well. Tecson requested for more time to comply with the company policy.
He applied for a transfer in Glaxo’s milk division, thinking that since Astra did
not have a milk division, the potential conflict of interest would be eliminated.
His application was denied in view of Glaxo’s least-movement-possible policy.
Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del Sur
sales area. Tecson asked Glaxo to reconsider its decision, but his request was
denied. Tecson sought Glaxo’s reconsideration regarding his transfer and
brought the matter to Glaxo’s Grievance Committee. Glaxo, however, remained
firm in its decision and gave Tescon a deadline to comply with the transfer order.
Tecson defied the transfer order and continued acting as medical representative
in the Camarines Sur-Camarines Norte sales area. During the pendency of the
grievance proceedings, Tecson was paid his salary, but was not issued samples
of products which were competing with similar products manufactured by Astra.
He was also not included in product conferences regarding such products.
Because the parties failed to resolve the issue at the grievance machinery
level, they submitted the matter for voluntary arbitration. Glaxo offered Tecson
a separation pay of one-half month pay for every year of service but he declined
the offer. The National Conciliation and Mediation Board rendered
its decision declaring as valid Glaxo’s policy on relationships between its
employees and persons employed with competitor companies, and affirming
Glaxo’s right to transfer Tecson to another sales territory. Aggrieved, Tecson filed
a Petition for Review with the Court of Appeals assailing the NCMB Decision,
which was denied. The appellate court held that Glaxo’s policy prohibiting its
employees from having personal relationships with employees of competitor
companies is a valid exercise of its management prerogatives. Tecson’s motion
for reconsideration was likewise denied. Hence, this instant petition.
Petitioners contend that Glaxo’s policy against employees marrying
employees of competitor companies violates the equal protection clause of the
Constitution because it creates invalid distinctions among employees on account
only of marriage. They claim that the policy restricts the employees’ right to
marry. They also argue that Tecson was constructively dismissed as shown by
the following circumstances: (1) he was transferred from the Camarines Sur-
Camarines Norte sales area to the Butuan-Surigao-Agusan sales area, (2) he
suffered a diminution in pay, (3) he was excluded from attending seminars and
training sessions for medical representatives, and (4) he was prohibited from
promoting respondent’s products which were competing with Astra’s products.
On the other hand, Glaxo argues that the company policy is a valid
exercise of its management prerogatives and does not violate the equal protection
clause; and that Tecson’s reassignment from the Camarines Norte-Camarines
Sur sales area to the Butuan City-Surigao City and Agusan del Sur sales area
does not amount to constructive dismissal.
ISSUES:
1. Whether or not Glaxo’s policy against its employees marrying employees
from competitor companies is valid.
2. Whether or not Tecson was constructively dismissed.
HELD:
1. Yes.
Glaxo does not impose an absolute prohibition against relationships
between its employees and those of competitor companies. Its employees are free
to cultivate relationships with and marry persons of their own choosing. What
the company merely seeks to avoid is a conflict of interest between the employee
and the company that may arise out of such relationships. Glaxo’s policy is a
valid exercise of management prerogative. Glaxo has a right to guard its trade
secrets, manufacturing formulas, marketing strategies and other confidential
programs and information from competitors, especially so that it and Astra are
rival companies in the highly competitive pharmaceutical industry.
That Glaxo possesses the right to protect its economic interests cannot be
denied. No less than the Constitution recognizes the right of enterprises to adopt
and enforce such a policy to protect its right to reasonable returns on
investments and to expansion and growth. Also, the challenged company policy
does not violate the equal protection clause of the Constitution as petitioners
erroneously suggest. It is a settled principle that the commands of the equal
protection clause are addressed only to the state or those acting under color of
its authority. The equal protection clause erects no shield against merely private
conduct, however, discriminatory or wrongful. The only exception occurs when
the state in any of its manifestations or actions has been found to have become
involved in the wrongful private conduct. The exception is not present in this
case. The company actually enforced the policy after repeated requests to the
employee to comply with the policy. The application of the policy was made in an
impartial and even-handed manner, with due regard for the lot of the employee.
Since Tecson knowingly and voluntarily entered into a contract of
employment with Glaxo, the stipulations therein have the force of law between
them and, thus, should be complied with in good faith. He is therefore estopped
from questioning said policy.
2. No.
Constructive dismissal is defined as a quitting, an involuntary resignation
resorted to when continued employment becomes impossible, unreasonable, or
unlikely; when there is a demotion in rank or diminution in pay; or when a clear
discrimination, insensibility or disdain by an employer becomes unbearable to
the employee. None of these conditions are present in the instant case. The
record does not show that Tescon was demoted or unduly discriminated upon
by reason of such transfer. Glaxo properly exercised its management prerogative
in reassigning Tecson to the Butuan City sales area.
In Abbott Laboratories (Phils.), Inc. v. National Labor Relations
Commission, the Court upheld the right of the drug company to transfer or
reassign its employee in accordance with its operational demands and
requirements. The ruling of the Court therein also finds application in the instant
case. By the very nature of his employment, a drug salesman or medical
representative is expected to travel. He should anticipate reassignment according
to the demands of their business.
ADJUDICATION: Petition was denied for lack of merit.
