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VOL. 438, SEPTEMBER 17, 2004 343

Duncan Association of Detailman-PTGWO vs. Glaxo Wellcome
Philippines, Inc.
*
G.R. No. 162994. September 17, 2004.

DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and

PEDRO A. TECSON, petitioners, vs. GLAXO WELLCOME
PHILIPPINES, INC., respondent.

Labor Law; Dismissals; Glaxo’s policy prohibiting an employee from

having a relationship with an employee of a competitior company is a valid
exercise of management prerogative.—No reversible error can be ascribed
to the Court of Appeals when it ruled that 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.
Same; Same; While our laws endeavor to give life to the constitutional
policy on social justice and the protection of labor, it does not mean that
every labor dispute will be decided in favor of the workers; The law also
recognizes that management has rights which are also entitled to respect
and enforcement in the interest of fair play.—That Glaxo possesses the right
to protect its economic interests cannot be denied. No less than the
Constitution recognizes the right of enterprises to adopt and enforce such a
policy to protect its right to reasonable returns on investments and to
expansion and growth. Indeed, while our laws endeavor to give life to the
constitutional policy on social justice and the protection of labor, it does not
mean that every labor dispute will be decided in favor of the workers. The
law also recognizes that management has rights which are also entitled to
respect and enforcement in the interest of fair play.
Same; Same; The challenged company policy does not violate the
equal protection clause of the Constitution.—The challenged company
policy does not violate the equal protection clause of the Constitution as
petitioners erroneously suggest. It is a settled principle that the commands
of the equal protection clause are addressed only to the state or those acting
under color of its authority. Corolla-

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_______________

* SECOND DIVISION.

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rily, it has been held in a long array of U.S. Supreme Court decisions that
the equal protection clause erects no shield against merely private conduct,
however, discriminatory or wrongful. The only exception occurs when the
state in any of its manifestations or actions has been found to have become
entwined or involved in the wrongful private conduct. Obviously, however,
the exception is not present in this case.
Same; Same; Glaxo does not impose an absolute prohibition against
relationships between its employees and those of competitor companies;
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.—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.
Same; Same; Constructive Dismissal; Definition of Constructive
Dismissal.—The Court finds no merit in petitioners’ contention that Tecson
was constructively dismissed when he was transferred from the Camarines
Norte-Camarines Sur sales area to the Butuan City-Surigao City-Agusan del
Sur sales area, and when he was excluded from attending the company’s
seminar on new products which were directly competing with similar
products manufactured by Astra. Constructive dismissal is defined as a
quitting, an involuntary resignation resorted to when continued employment
becomes impossible, unreasonable, or unlikely; when there 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 of these
conditions are present in the instant case. The record does not show that
Tecson was demoted or unduly discriminated upon by reason of such
transfer.

PETITION for review on certiorari of the decision and resolution of

the Court of Appeals.

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The facts are stated in the resolution of the Court.

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Duncan Association of Detailman-PTGWO vs. Glaxo Wellcome
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Luciano R. Caraang for petitioners.

Castillo, Laman, Tan, Pantaleon and San Jose for respondent.

RESOLUTION

TINGA, J.:

Confronting the Court in this petition is a novel question, with

constitutional overtones, involving the validity of the policy of a
pharmaceutical company prohibiting its employees from marrying
employees of any competitor company. 1
This is a Petition for Review on Certiorari assailing the Decision
dated May 19, 2003 and the Resolution dated2 March 26, 2004 of the
Court of Appeals in CA-G.R. SP No. 62434.
Petitioner Pedro A. Tecson (Tecson) was hired by respondent
Glaxo Wellcome Philippines, Inc. (Glaxo) as medical representative
on October 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 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

_______________

1 Penned by Associate Justice Rosmari D. Carandang and concurred in by Justices

Conrado M. Vasquez, Jr. and Mercedes GozoDadole. Rollo, pp. 22-32.
2 Duncan Association of Detailman-PTGWO and Pedro A. Tecson, petitioners, v.
Glaxo Wellcome Philippines, Inc., respondent.

346

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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 six months.
Tecson was initially assigned to market Glaxo’s products in the
Camarines Sur-Camarines Norte sales area.
Subsequently, Tecson entered into a romantic
3
relationship with
Bettsy, an employee of Astra Pharmaceuticals (Astra), a competitor
of Glaxo. Bettsy was Astra’s Branch Coordinator in Albay. She
supervised the district managers and medical representatives of her
company and prepared marketing strategies for Astra in that area.
Even before they got married, Tecson received several reminders
from his District Manager regarding the conflict of interest which
his relationship with Bettsy might engender. Still, love prevailed,
and Tecson married Bettsy in September 1998.
In January 1999, Tecson’s superiors informed him that his
marriage to Bettsy gave rise to a conflict of interest. Tecson’s
superiors reminded him that he and Bettsy should decide which one
of them would resign from their jobs, although they told him that
they wanted to retain him as much as possible because he was
performing his job well.
Tecson requested for time to comply with the company policy
against entering into a relationship with an employee of a competitor
company. He explained that Astra, Bettsy’s employer, was planning
to merge with Zeneca, another drug company; and Bettsy was
planning to avail of the redundancy package to be offered by Astra.
With Bettsy’s separation from her company, the potential conflict of
interest would be eliminated. At the same time, they would be able
to avail of the attractive redundancy package from Astra.

_______________

3 Now Astra Zeneca Pharmaceuticals, Inc.

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In August 1999, Tecson again requested for more time to resolve the
problem. In September 1999, Tecson applied for a transfer in

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Glaxo’s milk division, thinking that since Astra did not have a milk
division, the potential conflict of interest would be eliminated. His
application was denied 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 to
reconsider its decision, but his request was denied.
Tecson sought Glaxo’s reconsideration regarding his transfer and
brought the matter to Glaxo’s Grievance Committee. Glaxo,
however, remained firm in its decision and gave Tescon until
February 7, 2000 to comply with the transfer order. Tecson defied
the transfer order and continued acting as medical representative in
the Camarines Sur-Camarines Norte sales area.
During the pendency of the grievance proceedings, Tecson was
paid his salary, but was not issued samples of products which were
competing with similar products manufactured by Astra. He was
also not included in product conferences regarding such products.
Because the parties failed to resolve the issue at the grievance
machinery level, they submitted the matter for voluntary arbitration.
Glaxo offered Tecson a separation pay of onehalf (½) month pay for
every year of service, or a total of P50,000.00 but he declined the
offer. On November 15, 2000, the National Conciliation and
Mediation Board (NCMB) rendered its Decision declaring as valid
Glaxo’s policy on relationships between its employees and persons
employed with competitor companies, and affirming Glaxo’s right to
transfer Tecson to another sales territory.
Aggrieved, Tecson filed a Petition for Review with the Court of
Appeals assailing 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
not err in rendering its Decision. The appellate

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Duncan Association of Detailman-PTGWO vs. Glaxo Wellcome
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court held that Glaxo’s policy prohibiting its employees from having
personal relationships with employees of competitor
4
companies is a
valid exercise of its management prerogatives.
Tecson filed a Motion for Reconsideration of the appellate
court’s Decision, but the motion was 5denied by the appellate court in
its Resolution dated March 26, 2004.
Petitioners filed the instant petition, arguing therein that (i) the
Court of Appeals erred in affirming the NCMB’s finding that the
Glaxo’s policy prohibiting its employees from marrying an
employee of a competitor company is valid; and (ii) the Court of
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Appeals also erred in not finding that Tecson was constructively

dismissed when he was transferred to a new sales territory, and
deprived6of the opportunity to attend products seminars and training
sessions.
Petitioners contend that Glaxo’s policy against employees
marrying employees of competitor companies violates the equal
protection clause of the Constitution because it creates invalid
distinctions among employees on account only of marriage. 7
They
claim that the policy restricts the employees’ right to marry.
They also argue that Tecson was constructively dismissed as
shown by the following circumstances: (1) he was transferred from
the Camarines Sur-Camarines Norte sales area to the Butuan-
Surigao-Agusan sales area, (2) he suffered a diminution in pay, (3)
he was excluded from attending seminars and training sessions for
medical representatives, and (4) he was prohibited from promoting8
respondent’s products which were competing with Astra’s products.
In its Comment on the petition, Glaxo argues that the company
policy prohibiting its employees from having a relation-

_______________

4 Rollo, pp. 28-32.

5 Id., at p. 55.
6 Id., at p. 9.
7 Id., at pp. 9-11.
8 Id., at pp. 14-17.

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ship with and/or marrying an employee of a competitor company is

a valid exercise of its management prerogatives and does not violate
the equal protection clause; and that Tecson’s reassignment from the
Camarines Norte-Camarines Sur sales area to the Butuan City-
Surigao City and Agusan 9
del Sur sales area does not amount to
constructive dismissal.
Glaxo insists that as a company engaged in the promotion and
sale of pharmaceutical products, it has a genuine interest in ensuring
that its employees avoid any activity, relationship or interest that
may conflict with their responsibilities to the company. Thus, it
expects its employees to avoid having personal or family interests in
any competitor company which may influence their actions and
decisions and consequently deprive Glaxo of legitimate profits. The
policy is also aimed at preventing a competitor 10company from
gaining access to its secrets, procedures and policies.
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It likewise asserts that the policy does not prohibit marriage per
se but only proscribes existing or future relationships with
employees of competitor companies, and is therefore not violative of
the equal protection clause. It maintains that considering11 the nature
of its business, the prohibition is based on valid grounds.
According to Glaxo, Tecson’s marriage to Bettsy, an employee of
Astra, posed a real and potential conflict of interest. Astra’s products
were in direct competition with 67% of the products sold by Glaxo.
Hence, Glaxo’s enforcement of the foregoing policy in12Tecson’s case
was a valid exercise of its management prerogatives. In any case,
Tecson was given several months to remedy the situation, and was
even en-

_______________

9 Id., at pp. 96-112.

10 Id., at pp. 99-100.
11 Id., at pp. 101-102.
12 Id., at pp. 102-103.

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Duncan Association of Detailman-PTGWO vs. Glaxo Wellcome
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couraged13
not to resign but to ask his wife to resign from Astra
instead.
Glaxo also points out that Tecson can no longer question the
assailed company policy because when he signed his contract of
employment, he was aware that such policy was stipulated therein.
In said contract, he also agreed to resign from respondent if the
management finds that his relationship with an employee of 14a
competitor company would be detrimental to the interests of Glaxo.
Glaxo likewise insists that Tecson’s reassignment to another sales
area and his exclusion from seminars regarding respondent’s new
products did not amount to constructive dismissal.
It claims that in view of Tecson’s refusal to resign, he was
relocated from the Camarines Sur-Camarines Norte sales area to the
Butuan City-Surigao City and Agusan del Sur sales area. Glaxo
asserts that in effecting the reassignment, it also considered the
welfare of Tecson’s family. Since Tecson’s hometown was in
Agusan del Sur and his wife traces her roots to Butuan City, Glaxo
assumed that his transfer from the Bicol region to the Butuan City
sales area would be favorable to him and his family as he would be
relocating15 to a familiar territory and minimizing his travel
expenses.

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In addition, Glaxo avers that Tecson’s exclusion from the seminar

concerning the new anti-asthma drug was due to the fact that said
product was in direct competition with a drug which was soon to be
sold by Astra, and hence, would pose a potential conflict of interest
for him. Lastly, the delay in Tecson’s receipt of his sales
paraphernalia was due to the mix-up created by his refusal to
transfer to the Butuan City sales area (his paraphernalia was
delivered to his new sales area

_______________

13 Id., at pp. 102-104.

14 Id., at pp. 104-105.
15 Id., at p. 64.

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instead of Naga City16 because the supplier thought he already

transferred to Butuan).
The Court is tasked to resolve the following issues: (1) Whether
the Court of Appeals erred in ruling that Glaxo’s policy against its
employees marrying employees from competitor companies is valid,
and in not holding that said policy violates the equal protection
clause of the Constitution; (2) Whether Tecson was constructively
dismissed.
The Court finds no merit in the petition.
The stipulation in Tecson’s contract of employment with Glaxo
being questioned by petitioners provides:

...
10. You agree to disclose to management any existing or future
relationship you may have, either by consanguinity or affinity with co-
employees or employees of competing drug companies. Should it pose a
possible conflict of interest in management discretion, you agree to resign
voluntarily
17
from the Company as a matter of Company policy.
...

The same contract also stipulates that Tescon agrees to abide by the
existing company rules of Glaxo, 18
and to study and become
acquainted with such policies. In this regard, the Employee
Handbook of Glaxo expressly informs its employees of its rules
regarding conflict of interest:

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1. Conflict of Interest
Employees should avoid any activity, investment relationship, or interest
that may run counter to the responsibilities which they owe Glaxo
Wellcome.
Specifically, this means that employees are expected:

_______________

16 Id., at pp. 106-110.

17 See Decision of the Court of Appeals; Rollo, pp. 23-24.
18 Item No. 6 of Tecson’s employment contract cited by the Court of Appeals in its
Decision, Id.

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Duncan Association of Detailman-PTGWO vs. Glaxo Wellcome
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a. To avoid having personal or family interest, financial or otherwise,

in any competitor supplier or other businesses which may
consciously or unconsciously influence their actions or decisions
and thus deprive Glaxo Wellcome of legitimate profit.
b. To refrain from using their position in Glaxo Wellcome or
knowledge of Company plans to advance their outside personal
interests, that of their relatives, friends and other businesses.
c. To avoid outside employment or other interests for income which
would impair their effective job performance.
d. To consult with Management on such activities or relationships that
may lead to conflict of interest.

1.1. Employee Relationships

Employees with existing or future relationships either by consanguinity
or affinity with co-employees of competing drug companies are expected to
disclose such relationship to the Management. If management perceives a
conflict or potential conflict of interest, every effort shall be made, together
by management and the employee, to arrive at a solution within six (6)
months, either by transfer to another department in a non-counter checking
position, or by career preparation toward outside employment after Glaxo
Wellcome. Employees must be prepared for 19
possible resignation within six
(6) months, if no other solution is feasible.

No reversible error can be ascribed to the Court of Appeals when it

ruled that 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
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information from competitors, especially so that it and Astra are

rival companies in the highly competitive pharmaceutical industry.

_______________

19 Excerpt of Glaxo’s Employee Handbook, Annex “A” of respondent’s Comment,

Id., at p. 114.

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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.
That Glaxo possesses the right to protect its economic interests
cannot be denied. No less than the Constitution recognizes the right
of enterprises to adopt and enforce such a policy to protect its right20
to reasonable returns on investments and to expansion and growth.
Indeed, while our laws endeavor to give life to the constitutional
policy on social justice and the protection of labor, it does not mean
that every labor dispute will be decided in favor of the workers. The
law also recognizes that management has rights which are 21
also
entitled to respect and enforcement in the22
interest of fair play.
As held in a Georgia, U.S.A 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.
Consequently, the court ruled that an employer that discharged an
employee who was married to an employee of an active competitor
did not violate Title VII of the Civil

_______________

20 Section 3, Article XIII of the Constitution provides:

The State shall regulate the relations between workers and employers, recognizing the right of
labor to its just share in the fruits of production and the right of enterprises to reasonable
returns on investments, and to expansion and growth.

21 Sta. Catalina College v. National Labor Relations Commission, G.R. No.

144483, 416 SCRA 233, November 19, 2003.

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22 Emory v. Georgia Hospital Service Association (1971), DC Ga., 4 CCH EPD ¶

7785, 4 BNA FEP Cas 891, affd (CA5) 446 F2d 897, 4 CCH EPD ¶ 7786; Cited 45
Am. Jur. 2d Sec. 469.

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23
Rights Act of 1964. 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.
The challenged company policy does not violate the equal
protection clause of the Constitution as petitioners erroneously
suggest. It is a settled principle that the commands of the equal
protection clause are addressed
24
only to the state or those acting
under color of its authority. Corollarily, it has been held in a long
array of U.S. Supreme Court decisions that the equal protection
clause erects no shield against
25
merely private conduct, however,
discriminatory
26
or wrongful. The only exception occurs when the
state in any of its

_______________

23 42 USCS §§2000e–2002e–17. Title VII prohibits certain employers,

employment agencies, labor organizations, and joint labor-management training
committees from discriminating against applicants and employees on the basis of race
or color, religion, sex, national origin, or opposition to discriminatory practices.
There is no similar legislation in the Philippines.
24 Avery v. Midland County, 390 US 474, 20 L. Ed. 2d 45, 88 S Ct 1114, on
remand (Tex) 430 SW2d 487; Cooper v. Aaron, 358 US 1, 3 L. Ed. 2d 5, 78 S Ct
1401.
25 District of Columbia v. Carter, 409 US 418, 34 L. Ed. 2d 613, 93 S. Ct. 602, 35
L.Ed.2d 694, 93 S. Ct. 1411; Moose Lodge No. 107 v. Irvis, 407 US 163, 32 L. Ed. 2d
627, 92 S. Ct. 1965; United States v. Price, 383 US 787, 16 L. Ed. 2d 267, 86 S. Ct.
1152; Burton v. Wilmington Parking Authority, 365 US 715, 6 L. Ed. 2d 45, 81 S. Ct.
856; Shelley v. Kraemer, 334 US 1, 92 L. Ed. 1161, 68 S. Ct. 836, 3 ALR2d 441;
United States v. Classic, 313 US 299, 85 L. Ed. 1368, 61 S. Ct. 1031, 86 L. Ed. 565,
62 S. Ct. 51; Nixon v. Condon, 286 US 73, 76 L. Ed. 984, 52 S. Ct. 484, 88 ALR 458;
Iowa-Des Moines Nat. Bank v. Bennet, 284 US 239, 76 L. Ed. 265, 52 S. Ct. 133;
Corrigan v. Buckley, 271 US 323, 70 L. Ed. 969, 46 S. Ct. 521; U.S.—Adickes v. S.H.
Kress & Co., N.Y., 90 S. Ct. 1598, 398 U.S. 144, 26 L. Ed. 2d 142.
26 The equal protection clause contained in the Fourteenth Amendment of the U.S.
Constitution is a restriction on the state governments and operates exclusively upon
them. It does not extend

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manifestations or actions has been found to have

27
become entwined
or involved in the wrongful private conduct. Obviously, however,
the exception is not present in this case. Significantly, the company
actually enforced the policy after repeated requests to the employee
to comply with the policy. Indeed, the application of the policy was
made in an impartial and even-handed manner, with due regard for
the lot of the employee.
In any event, 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. As succinctly explained by the appellate court,
thus:

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
28
prerogatives to ensure maximum
profit and business success. . .

The Court of Appeals also correctly noted that the assailed company
policy which forms part of respondent’s Employee

_______________

to authority exercised by the Government of the United States. 16 A AM JUR 2d

§742.
27 Gilmore v. Montgomery, 417 US 556, 41 L. Ed. 2d 304, 94 S. Ct. 2416; Evans v.
Newton, 382 US 296, 15 L Ed 2d 373, 86 S Ct 486; Anderson v. Martin, 375 US 399,
11 L. Ed. 2d 430, 84 S. Ct. 454; Peterson v. Greenville, 373 US 244, 10 L. Ed. 2d
323, 83 S Ct 1119; Burton v. Wilmington Parking Authority, supra note 25.
28 Decision of the Court of Appeals, Rollo, p. 28.

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Code of Conduct and of its contracts with its employees, such as that
signed by Tescon, was made known to him prior to his employment.
Tecson, therefore, was aware of that restriction when he signed his
employment contract and when he entered into a relationship with
Bettsy. Since Tecson knowingly and voluntarily entered into a
contract of employment with Glaxo, the stipulations therein have the
force of law29 between them and, thus, should be complied with in
good faith.” He is therefore estopped from questioning said policy.
The Court finds no merit in petitioners’ contention that Tecson
was constructively dismissed when he was transferred from the
Camarines Norte-Camarines Sur sales area to the Butuan City-
Surigao City-Agusan del Sur sales area, and when he was excluded
from attending the company’s seminar on new products which were
directly competing with similar products manufactured by Astra.
Constructive dismissal is defined as a quitting, an involuntary
resignation resorted to when continued employment becomes
impossible, unreasonable, or unlikely; when there is a demotion in
rank or diminution in pay; or when a clear discrimination,
insensibility
30
or disdain by an employer becomes unbearable to the
employee. None of these conditions are present in the instant case.
The record does not show that Tecson was demoted or unduly
discriminated upon by reason of such transfer. As found by the
appellate court, Glaxo properly exercised its management
prerogative in reassigning Tecson to the Butuan City sales area:

. . . In this case, petitioner’s transfer to another place of assignment was

merely in keeping with the policy of the company in

_______________

29 Article 1159, Civil Code. See National Sugar Trading and/or the Sugar Regulatory
Administration v. Philippine National Bank, G.R. No. 151218, January 18, 2003, 396 SCRA
528; Pilipinas Hino, Inc. v. Court of Appeals, G.R. No. 126570, August 18, 2000, 338 SCRA
355.
30 Leonardo v. National Labor Relations Commission, G.R. Nos. 125303, and 126937, June
16, 2000, 333 SCRA 589.

357

VOL. 438, SEPTEMBER 17, 2004 357

Duncan Association of Detailman-PTGWO vs. Glaxo Wellcome
Philippines, Inc.

avoidance of conflict of interest, and thus valid . . . Note that [Tecson’s]

wife holds a sensitive supervisory position as Branch Coordinator in her
employer-company which requires her to work in close coordination with
District Managers and Medical Representatives. Her duties include
monitoring sales of Astra products, conducting sales drives, establishing and
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furthering relationship with customers, collection, monitoring and managing

Astra’s inventory . . . she therefore takes an active participation in the
market war characterized as it is by stiff competition among pharmaceutical
companies. Moreover, and this is significant, petitioner’s sales territory
covers Camarines Sur and Camarines Norte while his wife is supervising a
branch of her employer in Albay. The proximity of their areas of
responsibility, all in the same Bicol Region, renders the conflict of interest
not only possible, but actual, as learning by one spouse of the other’s market
strategies in the region would be inevitable. [Management’s] appreciation of
a conflict31 of interest is therefore not merely illusory and wanting in factual
basis . . .

In Abbott Laboratories
32
(Phils.), Inc. v. National Labor Relations
Commission, which involved a complaint filed by a medical
representative against his employer drug company for illegal
dismissal for allegedly terminating his employment when he refused
to accept his reassignment to a new area, the Court upheld the right
of the drug company to transfer or reassign its employee in
accordance with its operational demands and requirements. The
ruling of the Court therein, quoted hereunder, also finds application
in the instant case:

By the very nature of his employment, a drug salesman or medical

representative is expected to travel. He should anticipate reassignment
according to the demands of their business. It would be a poor drug
corporation which cannot even assign its representatives or detail men to
new markets calling for opening or expansion or to areas where the need for
pushing its products is33 great. More so if such reassignments are part of the
employment contract.

_______________

31 Rollo, pp. 30-31.

32 G.R. No. L-76959, October 12, 1987, 154 SCRA 713.
33 Id., at p. 719.

358

358 SUPREME COURT REPORTS ANNOTATED

Duncan Association of Detailman-PTGWO vs. Glaxo Wellcome
Philippines, Inc.

As noted earlier, the challenged policy has been implemented by

Glaxo impartially and disinterestedly for a long period of time. In
the case at bar, the record shows that Glaxo gave Tecson several
chances to eliminate the conflict of interest brought about by his
relationship with Bettsy. When their relationship was still in its
initial stage, Tecson’s supervisors at Glaxo constantly reminded him

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about its effects on his employment with the company and on the
company’s interests. After Tecson married Bettsy, Glaxo gave him
time to resolve the conflict by either resigning from the company or
asking his wife to resign from Astra. Glaxo even expressed its desire
to retain Tecson in its employ because of his satisfactory
performance and suggested that he ask Bettsy to resign from her
company instead. Glaxo likewise acceded to his repeated requests
for more time to resolve the conflict of interest. When the problem
could not be resolved after several years of waiting, Glaxo was
constrained to reassign Tecson to a sales area different from that
handled by his wife for Astra. Notably, the Court did not terminate
Tecson from employment but only reassigned him to another area
where his home province, Agusan del Sur, was included. In effecting
Tecson’s transfer, Glaxo even considered the welfare of Tecson’s
family. Clearly, the foregoing dispels
34
any suspicion of unfairness
and bad faith on the part of Glaxo.
WHEREFORE, the Petition is DENIED for lack of merit. Costs
against petitioners.
SO ORDERED.

Austria-Martinez and Callejo, Sr., JJ., concur.

Puno (Chairman), J., I concur in the result.
Chico-Nazario, J., On Leave.

Petition denied.

_______________

34 Decision of the Court of Appeals, Rollo, pp. 24-27.

359

VOL. 438, SEPTEMBER 20, 2004 359

Re: Request for the Transfer of Station of the 10th MCTC, Merida-
Isabel, Leyte from Merida to Isabel, Leyte

Note.—An employer, as an exercise of management prerogative,

has the right to adopt valid and equitable grounds as basis for
terminating or transferring employees. (De La Salle University vs.
De La Salle University Employees Association, 330 SCRA 363
[2000])

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