REPUBLIC OF THE PHILIPPINES

REGIONAL TRIAL COURT

THIRD JUDICIAL REGION
BRANCH 56
ANGELES CITY

TOP SELLERS PLUS, INC.

Plaintiff,

-versus- R-ANG-16-01137-CV
For: Breach of Contract
and Damages
ARTHERIS G. IBALE
Defendant.

X--------------------X

ANSWER WITH COUNTERCLAIM

DEFENDANT Artheris G. Ibale, through counsel and unto this

Honorable Court, do hereby repose and state, that:

Below are Defendant's specific denials on the provisions of the

Complaint:

SPECIFIC DENIAL

1. That Defendant specifically and categorically denies

paragraph 3 of the Complaint for lack of knowledge as to the veracity
and credibility of the statement. The reason Defendant was forced to
resign from employment from Plaintiff Corporation is the ongoing
investigation being conducted by the NBI on the alleged un-
registered activities of the Plaintiff and that Defendant was afraid
that she might be wrongfully implicated in the said investigation;

2. That Defendant specifically and categorically denies

paragraph 4 of the Complaint for lack of knowledge as to the veracity
and credibility of the statement. Defendant specifically denies
violation of the provision of her employment contract for the reason
that the non-compete clause as stated in the Complaint is void for
being against public policy. Defendant specifically denies being
employed with a competitor of the company for the reason that my
current employer caters different countries such as Italy and Russia
which was not being catered by the Plaintiff;

3. That Defendant specifically and categorically denies the

veracity of the employment contract attached as Annex "B" and
"B-1" of the Complaint for lack of knowledge as to the veracity and
credibility of certain provisions thereto. While Defendant does not
deny the existence of the employment contract with Plaintiff,
Defendant specifically denies full knowledge of the blank portions of
the contract which were not filled-in and all other provisions thereof
for not being given the chance to negotiate in the terms of my
employment;

4. That Defendant specifically and categorically denies

paragraph 5 of the Complaint for lack of knowledge as to the veracity
and credibility of the statement;

5. That Defendant specifically and categorically denies

paragraph 6 of the Complaint for lack of knowledge as to the veracity
and credibility of the statement. Plaintiff did not suffer any actual
damages for the Defendant to pay.

6. That Defendant specifically and categorically denies

paragraph 7 of the Complaint for lack of knowledge as to the veracity
and credibility of the statement;

By way of answer, herein Defendant re-pleads the following facts:

FACTS:

7. Plaintiff is a domestic corporation, located in Pampanga

and was in the general business of business process outsourcing
(“BPO”) with the following services (1) Customer Service (2)
Telemarketing (3) Encoding (4) Appointment setting survey (5)
Technical Support (6) Ebay Support. Attached is a company of the
Company profile of Plaintiff marked as Annex “1”;

8. Sometime in May 2014, Defendant was employed by

Plaintiff upon signing of a pro-forma employment contract by
Plaintiff. Defendant’s position is classified as a rank and file employee
with a title of "Technical Support Representative" catering to the
services that Plaintiff offers;

9. Defendant was never given the opportunity to negotiate

the terms and conditions of her employment, due to the fact that, it
was the only available opportunity and she was afraid to let said
opportunity pass;

10. As a rank and file employee, Defendant's job functions

are limited to assisting clients through phone calls and answering e-
mail queries;

11. While employed with Plaintiff, the Company was served

with a search warrant by the National Bureau of Investigation (“NBI”)
for allegedly committing un-registered activities;

12. On 08 July 2015, Defendant decided to resign from work

with Plaintiff due to personal and safety reasons resulting from the
ongoing investigation of the NBI for fear of being wrongfully
implicated in the operations of the Plaintiff;

13. Defendant struggled to find a job due to her limited

experience. On 17 February 2016 she was fortunate to find a job in
as a rank and file employee doing sales with Glitz Marketing Solutions
(the “Glitz”) a Company located in Ortigas. Attached herewith is the
employment contract marked as Annex "2";

14. Her duties included Telemarketing, Sales Center, chat

services to name a few. Attached is a copy of the Articles of
Incorporation of Glitz marked as Annex “3” and Company Profile
marked as Annex “4”;

15. While defendant was still under training and was only
starting to learn her role in Glitz, just as she was starting to reap the
benefits of her present employment, she was caught by surprise
when she suddenly received a demand letter from her former
employer;
 16. Said demand letter alleges that she committed breach of
contract with claims for damages for allegedly violating the Non-
Compete clause of her employment contract with Plaintiff;

17. Without any demand to cease and desist, Plaintiff,

through said demand letter, immediately demanded monetary
compensation for violation of the said provision in the employment
contract;

18. It appears, that Plaintiff is bent on capitalizing on the

error committed by a mere rank and file employee;

ARGUMENTS

Defendant was employed as a

Rank and file employee with a
title of Technical Support
Representative and possesses
no legitimate trade secret
that is not known to the
market.

19. Defendant's function is only to assist clients in cleaning

up their computers from viruses using softwares. Defendant is in no
way involved in the conceptualization and formulation of the product.
In fact, said softwares were not owned by the Plaintiff itself but is
only downloaded by technical supports online and free. These
softwares can be downloaded and used by any person who has an
internet connection;

20. Her job knowledge is general in nature and it is not so

different with other companies whether it is classified as a BPO or
not;

21. Thus, it follows that there is no way that Defendant may

acquire and exploit resources, knowledge and/or leads that came
from the Plaintiff that would damage the latter;

An Employment Contract is
impugned with Public Interest
making its interpretation and
implementation to be
construed strictly against the
employer and always in favor
of the employee.

22. Section 18 of the 1987 Philippine Constitution states that

"The State affirms LABOR as a primary social economic force. It
shall protect the rights of workers and promote their
welfare" (emphasis supplied). Further, Article XIII, Section 3 of the
Fundamental Law provides that "The State shall afford full
protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of
employment opportunities for all.";

23. Furthermore, the Civil Code has its own provision for the
protection of Laborers in Article 1702 and 1703 which reads:

"1702. In case of doubt, all labor legislation and

all labor contracts shall be construed in favor of
the safety and decent living for the
laborer."(emphasis supplied)

24. Interpreting the rights afforded by Article 1702 of the Civil

Code to the Labor sector, the Supreme Court, in the case of Masing
and Sons Development Corporation v. Gregorio Rogelio (GR no.
161787, April 27, 2011), held that "In any controversy between a
laborer and his master, doubts reasonably arising from the
evidence are resolved in favor of the laborer."(emphasis
supplied)

25. Therefore, the imposition of a non-compete provision

against an employee which has no threat of inflicting damage to his
former employer's business is unreasonable restraint of trade and
occupation and unduly deprivation of a person's constitutional right
of having an adequate means of livelihood;

26. The purpose of enforcing a non-compete agreement is to

protect an employer from unfair competition by a former employee
without imposing unreasonable restraint on the latter. But this
agreement must be intended as a protection of the employer, not as
a punishment of the employee. An employer cannot extract a
restrictive covenant from an employee merely to protect himself from
competition because it would restrain commerce and limit the
employee’s freedom to pursue his trade;

27. Furthermore, the practice of the BPO industry is not an

exclusive trade, much with the business of the Plaintiff. Plaintiff did
not develop its own products to be used by its Technical support but
instead, uses only softwares and methods downloaded free and
generally available to all internet users. This trade practice,
unless the position sought which involves trade secrets which are not
available to the general public must require certain restrictions, but
this should not be applied to ordinary rank and file employees;

28. The question posed now is whether a rank file

employee performing general functions and using products
generally available to the market is liable for damages under
the non-compete clause in an employment contract;

29. The answer should be in the negative.

30. Restrictive covenants are enforceable in this jurisdiction,

unless they are unreasonable.  And in order to determine whether
restrictive covenants are reasonable or not, the following factors
should be considered:(a) whether the covenant protects a legitimate
business interest of the employer; (b) whether the covenant creates
an undue burden on the employee; (c) whether the covenant is
injurious to the public welfare; (d) whether the time and territorial
limitations contained in the covenant are reasonable; and (e)
whether the restraint is reasonable from the standpoint of public
policy (Rivera v. Solidbank Corporation, G.R. No. 163269,  19 April
2006);

31. However, in the case of G. Martini, Ltd. v. Glaiserman ,as

enunciated in the case of Tiu vs. Platinum Plans(G.R. 163512,
February 28, 2007) the Supreme Court declared “a similar
stipulation as void for being an unreasonable restraint of
trade. There, the employee was prohibited from engaging in
any business similar to that of his employer for a period of
one year. Since the employee was employed only in
connection with the purchase and export of abaca, among
the many businesses of the employer, the Court considered
the restraint too broad since it effectively prevented the
employee from working in any other business similar to his
employer even if his employment was limited only to one of
its multifarious business activities.”(Emphasis Supplied)

32. Defendant was employed by Plaintiff only for a period of

14 months from May 2014 up to July 2015, applying the rulings of
the Supreme Court, in the span of such short period, it is unlikely for
Defendant to acquire trade secrets which would require protection by
the Plaintiff to prevent business damage caused by unfair
competition;

33. Furthermore, the business operation of Plaintiff is so

broad to encompass all BPO industries. By allowing the provision in
the employment contract to be sustained would ultimately create a
restraint on the lawful trade of the employee, more so, when the said
employee is a rank and file employee performing general duties in a
Company;

34. Finally, said provision ultimately concludes that all BPO

are the competitor of Plaintiff, when in fact not all BPO’s provide the
same service. It must be noted that a BPO in a sense, is a third party
provider of services or is an outsourcing company which provides
general services whether it may be in the form of voice assistance,
transcription, support and other similar business activities;

35. Thus, when Plaintiff imposed a prohibition on Defendant

not to be employed in pursuance of her trade for a period of one
year, is in effect a restraint not greater than that which is
necessary to afford a reasonable protection on the Plaintiff's
business;

36. It is worthy to note that the Supreme Court, in the case

of Ferassini v. Gsell (34 Phil 697 citing Gibbs v. Consolidated Gas Co.
of Baltimore 130 US 396), stated that " Also, as a general rule[,] an
employment contract provision barring the employee from competing
with the employer after termination of the employment is
enforceable if reasonable and supported by a valuable
consideration."(emphasis supplied);

37. Hence, it is likewise unreasonable to impose a non-

compete clause against Defendant for the reason that she did not
even undergone any formal training under the company that may bar
her for a certain period of time from being employed in another
company. Thus, imposition of the non-compete clause is not
supported by a valuable consideration;

Defendant was immediately

demanded to pay a baseless
amount without first
demanding the enforcement
of the Non-compete clause.

38. Article 19 of the New Civil Code states that "Every person
must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe
honesty and good faith."(emphasis supplied);

39. On 06 May 2016, Defendant received a letter from Gerald

Y. Medina demanding, in behalf of Plaintiff, a sum of Three Hundred
Thousand Pesos (P300,000.00) for alleged violation of the Non-
Compete clause;

40. Nowhere in the said letter stated that Plaintiff demanded

Defendant to cease and desist from employment pursuant to the
Non-compete clause. Thus, it is obvious that Plaintiff has no interest
whatsoever on whether Defendant would damage the Plaintiff's
business as long as the latter can collect a huge and baseless amount
of money from its former employees;

41. Apparently, the purpose of the Non-compete clause on

every employment contract entered into by the Plaintiff is not to
protect its business but to gain profit from the mistakes of its former
employees;

42. It is very obvious that the Plaintiff did not act with justice
or equity by not giving due prior notice to Defendant to cease from
employment. Plaintiff likewise did not observe good faith in
immediately demanding a huge amount of money from a mere rank
and file employee;

43. In the said demand letter which was prayed in the

Plaintiff's complaint, the latter demands the payment of Three
Hundred Thousand Pesos (P300,000.00) as actual damages;

44. Article 2199 of the Civil Code states that "Except as

provided by law or by stipulation, one is entitled to an adequate
compensation only for such pecuniary loss suffered by him as
he has duly proved. Such compensation is referred to as
actual or compensatory damages."(emphasis supplied);

45. It is a basic rule that to claim actual damages, the

claimant must prove the claim with reasonable degree of
certainty. The courts will not just adopt a sky-high amount without
proof that it was indeed incurred. This was reiterated by the
Supreme Court in the case of Gilfredo Bacolod v. People of the
Philippines (GR no. 206236, July 15, 2013) which states that " Actual
damages, to be recoverable, must not only be capable of
proof, but must actually be proved with a reasonable degree
of certainty. Courts cannot simply rely on speculation,
conjecture or guesswork in determining the fact and amount
of damages. To justify an award of actual damages, there
must be competent proof of the actual amount of loss,
credence can be given only to claims which are duly
supported by receipts." (emphasis supplied);

46. The claims for actual damages were not supported by any
document which tend to prove that actual damage was indeed
suffered by Plaintiff;

47. Further, the actual damages prayed for by the

Plaintiff is ridiculous and unconscionable. Defendant receives
gross salary from Plaintiff in the amount of P13,000.00 per month
including allowances. Even if we consider the gross annual salary of
the Defendant, it cannot reach the baseless actual damages
demanded by the Plaintiff;
 48. By reason of the instant precipitate and unfounded suit,
Defendant was constrained to hire the services of a Lawyer to defend
her rights before this Honorable Court for a professional fee in the
amount of Fifty Thousand (P50,000) Pesospayable in installments
plus Five Thousand Pesos (P5,000.00) per court appearance;

49. Similarly, the plaintiff’s unfounded suit has caused the

defendant mental anguish and suffering for which the
defendant’swork with her present employer has been seriously
compromised manifested through absences, lack of interest to work,
aloofness, lack of concentration in the work place due to the
unfounded and unreasonable claim by the Plaintiff. Thus she is
entitled to moral damages of (P100,000.00).

50. For the Plaintiff's action showing bad faith and to teach
the latter not to capitalize on its rank and file employees, Defendant
is entitled to Exemplary damages in the amount of Fifty Thousand
Pesos (P50,000.00)

PRAYER

In view thereof, herein Defendant prays that the Non-compete

clause stated in Section 12 of the Employment Contract be declared
void for being against public policy, the complaint be dismissed for
lack of merit and the defendant’s compulsory counterclaim be
granted, i.e.. attorney’s fees of One Hundred Thousand Pesos
(P100,000.00) plus moral damages of Fifty Thousand Pesos
(P50,000.00), Exemplary damages of Fifty Thousand Pesos
(P50,000.00), plus costs of suit.

The Defendant respectfully prays for such and other reliefs as

may be deemed just and equitable in the premises.

Quezon City for Angeles City, 03 June 2016.

 DE LA CRUZ PENACHOS
LAW OFFICE
th
20 Floor, CyberOne Building
Eastwood City Libis

By:

PATRICK I. PENACHOS
Roll No. 64888
IBP No. 1032957/03-18-2016/PPLM
PTR No. /5-19-2016/Manila
MCLE Compliance – V-0010458

NOTICE OF SUBMISSION

Regional Trial Court

Branch 56
Angeles City

Medina Law Office (Counsel for Complainant)

Office Suite C Bethaphil Clark Center,
Jose Abad Santos Clark Freeport Zone,
Pampanga

Please submit the foregoing Motion for Extension to file Answer

and/or Responsive Pleading to form part of the records of this case.

PATRICK PENACHOS

NOTICE OF SERVICE

The following Motion for Extension to file Answer and/or

Responsive Pleading was served to Plaintiff through registered mail
for lack of manpower to personally serve the same.

PATRICK PENACHOS