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

G.R. No. 162994. September 17, 2004.

FACTS:

Tecson is an employee of Glaxo. Included in the contract of employment he signed is that he agrees to abide all company rules which includes disclosure of any existing future relationships with co-employees and employees of competing drug companies. If management perceives a conflict of interest on the relationship, 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.

Subsequently, Tecson entered into a romantic relationship and married Bettsy, an employee of Astra, a competitor of Glaxo. Tecson’s superiors informed him that his marriage to Bettsy gave rise to a conflict of interest.

Tecson applied for a transfer in Glaxo’s milk division, thinking that since Astra did not have a milk division, the potential conflict of interest would be eliminated. However it was denied. In 1999, Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del Sur sales area. Tecson sought Glaxo’s reconsideration regarding his transfer but Glaxo remained firm in its decision.

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.

The National Conciliation and Mediation Board (NCMB) rendered its Decision which declared the validity of Glaxo’s policy on relationships between its employee with employees of competitor companies and its right to transfer Tecson to another sales territory.

The CA denied the petition for review filed by Tecson since the questioned policy is a valid exercise of its management prerogatives.

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. They claim that the policy restricts the employees’ right to marry.

Glaxo argues that the policy is a valid exercise of its management prerogatives since existing or future relationships with employees of competitor companies may compromise the interest of the company.

ISSUE:

WON Glaxo’s policy prohibiting its employees from marrying an employee of a competitor company violates the equal protection clause of the Constitution;

HELD:

NO. Glaxo’s policy is a valid exercise of management prerogative. Glaxo 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.

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. Corollarily, 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. 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.

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