CASE DIGEST: Duncan Association v. Glaxo Welcome Philippines

 


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

 

TOPIC: Stipulation against marriage

FACTS:

Petitioner Pedro A. Tecson signed a contract of employment as Medical Representative  with Glaxo Wellcome Philippines which stipulates, among others, 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 6 months.

Tecson entered into a romantic relationship with Bettsy, a Branch Coordinator in Albay for Glaxo’s competitor, Astra Pharmaceuticals. Despite receiving several reminders from his District Manager regarding the possible conflict of interest which may arise from his relationship with Betty, Tecson married Bettsy on September 1998.

ISSUE:

Whether Glaxo’s policy against its employees marrying employees from competitor companies is valid

RULING:

Glaxo’s policy 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, 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.

The prohibition against personal or marital relationships with employees of competitor companies upon Glaxo’s employees is reasonable under the circumstances because relationships of that nature might compromise 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 company will gain access to its secrets and procedures.

As held in a Georgia, USA case, it is a legitimate business practice to guard business confidentiality and protect a competitive position by even-handedly disqualifying from jobs male and female applicants or employees who are married to a competitor.  The Court pointed out that the policy was applied to men and women equally, and noted that the employer’s business was highly competitive and that gaining inside information would constitute a competitive advantage.

From the wordings of the contractual provision and the policy in its employee handbook, it is clear that 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.

The policy being questioned is not a policy against marriage. An employee of the company remains free to marry anyone of his or her choosing. The policy is not aimed at restricting a personal prerogative that belongs only to the individual. However, an employee’s personal decision does not detract the employer from exercising management prerogatives to ensure maximum profit and business success.


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