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ARTICLE 282

9. DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON

vs.GLAXO WELLCOME PHILIPPINES, INC.

KEYWORDS: relationship with employee of competitor, transfer, constructive dismissal

PONENTE: TINGA,

J.

DOCTRINE:

No less than the Constitution recognizes the right of enterprises to adopt and enforcesuch a policy to protect its right to reasonable returns on investments and to expansionand growth. Indeed, while the laws endeavor to give life to the constitutional policy onsocial justice and the protection of labor, it does not mean that every labor dispute willbe decided in favor of the workers. The law also recognizes that management hasrights which are also entitled to respect and enforcement in the interest of fair play.

Constructive dismissal is defined as a quitting, an involuntary resignation resorted to

when continued employment becomes impossible, unreasonable, or unlikely; whenthere 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

FACTS:

Pedro Tecson was hired by respondent Glaxo Wellcome Philippines, Inc. as a medicalrepresentative. His employment contract stipulates that he agrees to abide by existingcompany rules; to disclose to management any existing or future relationship byconsanguinity or affinity with co-employees or employees of competing drug companiesand 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 providesthe same provisions, further adding that if indeed management perceives an actual orpotential conflict between such relationship and the employees employment with thecompany, the management and the employee will explore the possibility of a transfer toanother department in a non-counterchecking position or preparation for employmentoutside the company after six months. Tecson was initially assigned to market Glaxosproducts in the Camarines Sur-Camarines Norte sales area. Subsequently, he enteredinto a romantic relationship with Bettsy, Astra Pharmaceuticals (Astra) BranchCoordinator in Albay, said company being respondents competitor. Despite warningsand reminders of possible conflict of interests, Tecson married Bettsy.

When confronted with the question of which of them would resign from their respectiveposts, Tecson requested for more time and explained that with Astras upcomingmerger with another drug company, Bettsy was planning to avail of the redundancypackage to be offered by Astra and consequently with said separation, the potentialconflict of interest would be eliminated. In November 1999, Glaxo transferred Tecson tothe Butuan City-Surigao City-Agusan del Sur sales area. Tecson asked Glaxo toreconsider its decision, but his request was denied, causing him to bring then matter toGlaxos Grievance Committee, but Glaxo remained firm in its decision and gave Tescon

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2. Whether Tecson was constructively dismissed.

SC RULING:

1. YES. Glaxos policy of prohibiting an employee from having a relationship with an

employee of a competitor company is a valid exercise of management prerogative.Glaxo has a right to guard its trade secrets, manufacturing formulas, marketingstrategies and other confidential programs and information from competitors, especiallyso that it and Astra are rival companies in the highly competitive pharmaceuticalindustry. The prohibition is reasonable because relationships of that nature mightcompromise the interests of the company. In laying down the assailed company policy,Glaxo only aims to protect its interests against the possibility that a competitor companywill gain access to its secrets and procedures. That Glaxo possesses the right to protectits economic interests cannot be denied. No less than the Constitution recognizes theright of enterprises to adopt and enforce such a policy to protect its right to reasonablereturns on investments and to expansion and growth. Indeed, while thelaws endeavor to

give life to the constitutional policy on social justice and the protection of labor, it doesnot mean that every labor dispute will be decided in favor of the workers. The law alsorecognizes that management has rights which are also entitled to respect andenforcement in the interest of fair play.

2. NO. Tecson was not constructively dismissed when he was transferred from theCamarines Norte-Camarines Sur sales area to the Butuan City-Surigao City-Agusan delSur sales area, and when he was excluded from attending the companys seminar onnew products which were directly competing with similar products manufactured by

Astra. Constructive dismissal is defined as a quitting, an involuntary resignation resortedto when continued employment becomes impossible, unreasonable, or unlikely; whenthere 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 ofthese conditions are present in the instant case. Tecson was neither demoted norunduly discriminated upon by reason of such transfer. Glaxo properly exercised itsmanagement prerogative in reassigning Tecson to the Butuan City sales area. It mustbe noted that Tecsons wife holds a sensitive supervisory position as BranchCoordinator in her employer-company which requires her to work in close coordinationwith District Managers and Medical Representatives, her duties consisting of monitoringsales of Astra products, conducting sales drives, establishing and furthering relationshipwith customers, collection, monitoring, and managing Astras inventory. She thereforetakes an active participation in the market war characterized as it is by stiff competitionamong pharmaceutical companies. The proximity of their areas of responsibility, all inthe same Bicol Region, renders the conflict of interest not only possible, but actual, aslearning by one spouse of the others market strategies in the region would beinevitable. Managements appreciation of a conflict of interest is therefore not merelyillusory and wanting in factual basis.