Duncan Association v. Glaxo Wellcome Philippines, Inc.

(JP)
17 September 2004 | Tinga, J. | Equal Protection Clause

FACTS:

• Petitioner Tecson, as a medical representative, signed a contract of employment

with Duncan which stipulates that to avoid conflict of interest, employees
must disclose to the management any existing or future relationship by
consanguinity or affinity with co-employees or employees of competing
drug companies. Should the management find such relationship as
conflicting, the employee must resign. 


• The Employee Code of Conduct of Glaxo also includes the prohibition of the
relationships and provides the consequences of transfer to another
department or preparation for employment outside the company for six
months. 


• Love prevailed. Tecson entered into a romantic relationship with Betsy, an

employee of Astra Pharmaceuticals (Astra), Glaxo’s competitior. They
eventually married amidst the persistent warnings of Tecson’s supervisors.



• Glaxo then transferred Tecson to the Butuan City-Surigao City-Agusan del Sur
sales area from his Camarines Sur-Camarines Norte area. Tecson brought
the matter to Glaxo’s Grievance Committee but was denied. 


• Tecson was paid his salary but was not issued samples of products that are
competing with Astra. He was also excluded from product conferences and
seminars. 


• When the parties submitted the matter for voluntary arbitration, Glaxo offered
Tecson separation pay of 50,000 but he declined. The National Conciliation
and Mediation Board (NCMB) rendered a decision declaring as valid
Glaxo’s policy.


• Tecson filed a petition for review with the Court of Appeals but the CA declared
that the NCMB did not err. The subsequent MR was also denied. Hence,
the petition.

ISSUE/S: WoN the CA erred in ruling that Glaxo’s policy against its employees
marrying employees from competitor companies violates the equal protection
clause of the constitution – No

WoN Tecson was constructively dismissed – No.


RULING: Petition is denied for lack of merit. Glaxo’s policy is valid.

RATIO:

• Glaxo’s policy of prohibiting relationships with competing companies is a

valid exercise of management prerogative. Glaxo has a right to guard
its trade secrets from competitors, especially so that it and Astra are
rivals in a highly competitive pharmaceutical industry. Section 3
Article 13 of the Constitution provides the right of enterprises to adopt
and enforce policies necessary for reasonable returns and growth. 


• The challenged company policy does not violate the equal protection clause.
It is a settled principle that the commands of the equal protection
clause are addressed only to the state or those acting under its
authority. Equal protection clause erects no shield against merely
private conduct however discriminatory or wrongful. The only
exception is if the state is involved in wrongful private conduct. 


• Glaxo does not impose an absolute prohibition against relationships. Its

employees are free to cultivate relationships and marry persons of their
choosing. What the company seeks to avoid is a conflict of interest to
the detriment of their profits and business success. 


• Tecson is also estopped from assailing the questioned policy because he

signed the employment contract, knowing all the stipulations therein.



• There is also no merit in petitioner’s contention that he was constructively

dismissed. Constructive dismissal is defined as a quitting, an involuntary
resignation with demotion in rank or pay. None of these conditions are
present in the instant case. Glaxo properly exercised its management
prerogatives in reassigning Tecson to Butuan City. The proximity of the
areas of responsibility of Tecson and his wife in Bicol, renders learning by
one’s spouse of the other’s marketing strategies inevitable.