G.R. Nos. 89971-75, October 17, 1990
CELIA B. CHUA, ET AL., and LIQUIDATION COMMITTEE OF STANFORD MICROSYSTEMS, INC., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER DOMINADOR M. CRUZ, public respondents, and FERNANDO R. GUMABON, ET AL., private respondents.

FACTS

Stanford Microsystems, Inc. (Stanford) filed a petition for suspension of payments with the Securities and Exchange Commission (SEC) in December 1985, docketed as SEC Case No. 2930. The SEC declared Stanford under a state of suspension and appointed a rehabilitation receiver. Consequently, numerous former employees filed separate labor cases for monetary claims against Stanford before the Department of Labor and Employment. While some cases were decided or archived, others remained pending. During the SEC proceedings, a Memorandum of Agreement (MOA) was executed on March 13, 1987, between Stanford’s Liquidation Committee (appointed by the SEC after rehabilitation failed) and the attorneys-in-fact representing the vast majority of the former employees. This MOA was approved by the SEC and provided for a global settlement of all employee claims.
The NLRC, through resolutions dated October 6, 1988, November 3, 1988, and January 3, 1990, issued orders in NLRC Injunction Case No. 1793. These orders denied a petition to stay labor proceedings, directed the Liquidation Committee to defer a P6 million payment to employees, and commanded the Committee to deposit attorney’s fees with the NLRC. These resolutions were issued primarily upon the instance of a minority group of employees and their counsel, Atty. Vicente Ocampo, who were not signatories to the SEC-approved MOA and who sought to assert claims and collect attorney’s fees through the labor tribunals.

ISSUE

Whether the National Labor Relations Commission and the Labor Arbiter acted without or in excess of jurisdiction by issuing resolutions that interfered with the implementation of a compromise agreement approved by the Securities and Exchange Commission in a liquidation proceeding.

RULING

The Supreme Court ruled that the NLRC and the Labor Arbiter acted without jurisdiction. The legal logic is anchored on the doctrine of primary jurisdiction. When Stanford filed its petition for suspension of payments with the SEC, the commission assumed exclusive jurisdiction over all claims against the corporation. The subsequent execution of the MOA, which constituted a compromise agreement on all money claims by the overwhelming majority of employees, and its approval by the SEC, rendered the agreement binding and conclusive upon all parties. The SEC’s approval vested the agreement with judicial sanction, making it the governing resolution for the settlement of employee claims.
Therefore, the labor tribunals had no authority to issue orders that would alter, impede, or interfere with the implementation of this SEC-sanctioned agreement. Their resolutions, which sought to defer payments and sequester funds contrary to the MOA’s terms, constituted an unlawful encroachment on the SEC’s exclusive domain over the corporation’s liquidation. The Court further found that Atty. Ocampo, having played no part in the negotiations leading to the MOA, had no right to interfere with its implementation to collect fees. Consequently, the Supreme Court granted the petition, declared the NLRC resolutions null and void, and ordered the labor tribunals and the private respondents to desist from interfering with the SEC liquidation process and the MOA’s implementation.