G.R. No. 162994; September 17, 2004
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON, petitioners, vs. GLAXO WELLCOME PHILIPPINES, INC., Respondent.

FACTS

Petitioner Pedro Tecson was hired by respondent Glaxo Wellcome Philippines, Inc. as a medical representative. He signed an employment contract and undertook to abide by company rules, including a policy requiring disclosure of any relationship by consanguinity or affinity with employees of competing drug companies. The policy stated that if management perceived a conflict of interest, it would explore a transfer of the employee to a non-counterchecking position or preparation for employment outside the company. Tecson later married Bettsy, an employee of Astra Pharmaceuticals, a direct competitor of Glaxo, who held a supervisory role involving marketing strategies. Despite reminders from management about the conflict, the marriage proceeded. Glaxo subsequently informed Tecson of the conflict and, after discussions and a denied transfer request, ultimately transferred him to a different sales territory. Tecson defied the transfer order and, after grievance proceedings failed, the matter was elevated to voluntary arbitration, which upheld Glaxo’s policy and transfer right.

ISSUE

The primary issue is whether Glaxo’s company policy prohibiting its employees from marrying employees of competitor companies is valid, and whether the transfer of Tecson constituted constructive dismissal.

RULING

The Supreme Court upheld the validity of Glaxo’s policy and found no constructive dismissal. The policy is a valid exercise of management prerogative, designed to protect the company’s legitimate business interests in a highly competitive industry where trade secrets and confidential information are paramount. The restriction is reasonable and not an absolute prohibition against marriage; it is a prohibition against marrying a competitor’s employee where a conflict of interest arises. The Court emphasized that an employer has the right to instill discipline, ensure loyalty, and protect its trade secrets. The policy was known to Tecson, who voluntarily agreed to it, making it a binding stipulation. Regarding the transfer, it was not motivated by discrimination or bad faith but was a logical measure to remove Tecson from a sales area where his spouse, employed by a competitor, operated. The transfer did not involve a demotion or diminution in pay, and the exclusion from certain product seminars was directly related to preventing conflict with his wife’s employer. Therefore, the transfer was a valid management action, not constructive dismissal. The petition was denied.