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Duncan Assoc. vs. Glaxo Wellcome Phil. || GR. No. 162994.pdf

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  481 Phil. 687 SECOND DIVISION[ G.R. No. 162994, September 17, 2004 ] DUNCAN ASSOCIATION OF DETAILMAN-PTGWO ANDPEDRO A. TECSON, PETITIONERS, VS. GLAXOWELLCOME PHILIPPINES, INC. RESPONDENT. R E S O L U T I O N TINGA, J.: Confronting the Court in this petition is a novel question, withconstitutional overtones, involving the validity of the policy of apharmaceutical company prohibiting its employees from marryingemployees of any competitor company.This is a Petition for Review on Certiorari   assailing the Decision [1]  datedMay 19, 2003 and the Resolution  dated March 26, 2004 of the Court of Appeals in CA-G.R. SP No. 62434. [2] Petitioner Pedro A. Tecson (Tecson) was hired by respondent GlaxoWellcome Philippines, Inc. (Glaxo) as medical representative onOctober 24, 1995, after Tecson had undergone training and orientation.Thereafter, Tecson signed a contract of employment which stipulates,among others, that he agrees to study and abide by existing companyrules; to disclose to management any existing or future relationship byconsanguinity or affinity with co-employees or employees of competingdrug companies and should management find that such relationshipposes a possible conflict of interest, to resign from the company.The Employee Code of Conduct of Glaxo similarly provides that anemployee is expected to inform management of any existing or futurerelationship by consanguinity or affinity with co-employees oremployees of competing drug companies. If management perceives aconflict of interest or a potential conflict between such relationship andthe employee’s employment with the company, the management andthe employee will explore the possibility of a “transfer to anotherdepartment in a non-counterchecking position” or preparation foremployment outside the company after six months.  Tecson was initially assigned to market Glaxo’s products in theCamarines Sur-Camarines Norte sales area.Subsequently, Tecson entered into a romantic relationship with Bettsy,an employee of Astra Pharmaceuticals [3]  (Astra), a competitor of Glaxo. Bettsy was Astra’s Branch Coordinator in Albay. She supervisedthe district managers and medical representatives of her company andprepared marketing strategies for Astra in that area.Even before they got married, Tecson received several reminders fromhis District Manager regarding the conflict of interest which hisrelationship with Bettsy might engender. Still, love prevailed, andTecson married Bettsy in September 1998.In January 1999, Tecson’s superiors informed him that his marriage toBettsy gave rise to a conflict of interest. Tecson’s superiors remindedhim that he and Bettsy should decide which one of them would resignfrom their jobs, although they told him that they wanted to retain himas much as possible because he was performing his job well.Tecson requested for time to comply with the company policy againstentering into a relationship with an employee of a competitor company. He explained that Astra, Bettsy’s employer, was planning to merge withZeneca, another drug company; and Bettsy was planning to avail of theredundancy package to be offered by Astra. With Bettsy’s separationfrom her company, the potential conflict of interest would beeliminated. At the same time, they would be able to avail of theattractive redundancy package from Astra.In August 1999, Tecson again requested for more time resolve theproblem. In September 1999, Tecson applied for a transfer in Glaxo’smilk division, thinking that since Astra did not have a milk division, thepotential conflict of interest would be eliminated. His application wasdenied in view of Glaxo’s “least-movement-possible” policy.In November 1999, Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del Sur sales area. Tecson asked Glaxo toreconsider its decision, but his request was denied.Tecson sought Glaxo’s reconsideration regarding his transfer andbrought the matter to Glaxo’s Grievance Committee. Glaxo, however,remained firm in its decision and gave Tescon until February 7, 2000 tocomply with the transfer order. Tecson defied the transfer order andcontinued acting as medical representative in the Camarines Sur-  Camarines Norte sales area.During the pendency of the grievance proceedings, Tecson was paid hissalary, but was not issued samples of products which were competingwith similar products manufactured by Astra. He was also not includedin product conferences regarding such products.Because the parties failed to resolve the issue at the grievancemachinery level, they submitted the matter for voluntary arbitration. Glaxo offered Tecson a separation pay of one-half (½) month pay forevery year of service, or a total of P50,000.00 but he declined theoffer. On November 15, 2000, the National Conciliation and MediationBoard (NCMB) rendered its Decision declaring as valid Glaxo’s policy onrelationships between its employees and persons employed withcompetitor companies, and affirming Glaxo’s right to transfer Tecson toanother sales territory.Aggrieved, Tecson filed a Petition for Review   with the Court of Appealsassailing the NCMB Decision .On May 19, 2003, the Court of Appeals promulgated its Decision denying the Petition for Review   on the ground that the NCMB did noterr in rendering its Decision . The appellate court held that Glaxo’spolicy prohibiting its employees from having personal relationships withemployees of competitor companies is a valid exercise of itsmanagement prerogatives. [4] Tecson filed a Motion for Reconsideration  of the appellate court’s Decision , but the motion was denied by the appellate court in its Resolution  dated March 26, 2004. [5] Petitioners filed the instant petition, arguing therein that (i) the Courtof Appeals erred in affirming the NCMB’s finding that the Glaxo’s policyprohibiting its employees from marrying an employee of a competitorcompany is valid; and (ii) the Court of Appeals also erred in not findingthat Tecson was constructively dismissed when he was transferred to anew sales territory, and deprived of the opportunity to attend productsseminars and training sessions. [6] Petitioners contend that Glaxo’s policy against employees marryingemployees of competitor companies violates the equal protection clauseof the Constitution because it creates invalid distinctions amongemployees on account only of marriage. They claim that the policyrestricts the employees’ right to marry. [7]  They also argue that Tecson was constructively dismissed as shown bythe following circumstances: (1) he was transferred from theCamarines Sur-Camarines Norte sales area to the Butuan-Surigao-Agusan sales area, (2) he suffered a diminution in pay, (3) he wasexcluded from attending seminars and training sessions for medicalrepresentatives, and (4) he was prohibited from promotingrespondent’s products which were competing with Astra’s products. [8] In its Comment   on the petition, Glaxo argues that the company policyprohibiting its employees from having a relationship with and/ormarrying an employee of a competitor company is a valid exercise of itsmanagement prerogatives and does not violate the equal protectionclause; and that Tecson’s reassignment from the Camarines Norte-Camarines Sur sales area to the Butuan City-Surigao City and Agusandel Sur sales area does not amount to constructive dismissal. [9] Glaxo insists that as a company engaged in the promotion and sale of pharmaceutical products, it has a genuine interest in ensuring that itsemployees avoid any activity, relationship or interest that may conflictwith their responsibilities to the company. Thus, it expects itsemployees to avoid having personal or family interests in anycompetitor company which may influence their actions and decisionsand consequently deprive Glaxo of legitimate profits. The policy is alsoaimed at preventing a competitor company from gaining access to itssecrets, procedures and policies. [10] It likewise asserts that the policy does not prohibit marriage  per se  butonly proscribes existing or future relationships with employees of competitor companies, and is therefore not violative of the equalprotection clause. It maintains that considering the nature of itsbusiness, the prohibition is based on valid grounds. [11] According to Glaxo, Tecson’s marriage to Bettsy, an employee of Astra,posed a real and potential conflict of interest. Astra’s products were indirect competition with 67% of the products sold by Glaxo. Hence,Glaxo’s enforcement of the foregoing policy in Tecson’s case was a validexercise of its management prerogatives. [12]  In any case, Tecson wasgiven several months to remedy the situation, and was evenencouraged not to resign but to ask his wife to resign from Astrainstead. [13] Glaxo also points out that Tecson can no longer question the assailedcompany policy because when he signed his contract of employment,

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