(Molina v. Pacific Plans, Inc., G.R. No.

165476, [March 10,

2006], 519 PHIL 475-505)
An employee's skill, aptitude, and other subjective knowledge obtained in the
course of employment are not the property of his employer. However, an
employee occupying a managerial position or office is obliged to protect the
trade secret of his employer consisting of formula, process, device or
compilation which it uses in its business and gives it an opportunity to obtain
an advantage over competitors who do not know of such trade secret.
However, the rule does not apply to a matter of public knowledge or of
general knowledge within the industry.
Moreover, an employer has a protectible interest in the customer
relationships of its former employee established and/or nurtured while
employed by the employer, and is entitled to protect itself from the risk that
a former employee might appropriate customers by taking unfair advantage
of the contract developed while working for the employer.
While acting as an agent of his employer, an employee owes the duty of
fidelity and loyalty. Being a fiduciary, he cannot act inconsistently with his
agency or trust. He cannot solicit his employer's customers or co-employees
for himself or for a business competitor of his employer. If such employee or
officer connives with and induces another to betray his employer in favor of a
business competitor of his employer, he is held accountable for his mischief.

(Air Philippines Corp. v. Pennswell, Inc., G.R. No. 172835, [December 13,
2007], 564 PHIL 774-799)
A trade secret is defined as a plan or process, tool, mechanism or compound
known only to its owner and those of his employees to whom it is necessary
to confide it. The definition also extends to a secret formula or process not
patented, but known only to certain individuals using it in compounding some
article of trade having a commercial value.
A trade secret may consist of any formula, pattern, device, or compilation of
information that: (1) is used in one's business; and (2) gives the employer an
opportunity to obtain an advantage over competitors who do not possess the
information. Generally, a trade secret is a process or device intended for
continuous use in the operation of the business, for example, a machine or
formula, but can be a price list or catalogue or specialized customer list.
It is indubitable that trade secrets constitute proprietary rights. The inventor,
discoverer, or possessor of a trade secret or similar innovation has rights
therein which may be treated as property, and ordinarily an injunction will be
granted to prevent the disclosure of the trade secret by one who obtained the
information "in confidence" or through a "confidential relationship." American
jurisprudence has utilized the following factors to determine if an information
is a trade secret, to wit:
1. The extent to which the information is known outside
of the employer's business;
2. The extent to which the information is known by
employees and others involved in the business;
3. The extent of measures taken by the employer to
guard the secrecy of the information;
4. The value of the information to the employer and to
competitors;
5. The amount of effort or money expended by the
company in developing the information; and
6. The extent to which the information could be easily or
readily obtained through an independent source.

(Hormillosa v. Coca-Cola Bottlers Philippines, Inc., G.R. No. 198699,

[October 9, 2013])

We agree that route salesmen are likely individualistic personnel who roam
around selling softdrinks, deal with customers and are entrusted with large
asset and funds and property of the employer. There is a high degree of trust
and confidence reposed on them, and when confidence is breached, the
employer may take proper disciplinary action on them.
The work of a salesman exposes him to voluminous financial transactions
involving his employer's goods. The life of the soft drinks company depends
not so much on the bottling or production of the product since this is
primarily done by automatic machines and personnel who are easily
supervised but upon mobile and far-ranging salesmen who go from store to
store all over the country or region.
Salesmen are highly individualistic personnel who have to be trusted and left
essentially on their own. A high degree of confidence is reposed on them
because they are entrusted with funds or properties of their employer

(Tiu v. National Labor Relations Commission, G.R. No. 83433, [November

12, 1992])
In the language of the aforequoted Article 283(c) of the Labor Code,the same
must be based on willful breach of the trust reposed in the employee by his
employer. Ordinary breach will not suffice; it must be willful. Such breach is
willful if it is done intentionally, knowingly, and purposely, without justifiable
excuse, as distinguished from an act done carelessly, thoughtlessly"
heedlessly or inadvertently.

(Lima Land, Inc. v. Cuevas, G.R. No. 169523, [June 16, 2010], 635 PHIL 3654)
It must be noted, however, that in a plethora of cases, this Court has
distinguished the treatment of managerial employees from that of rank-andfile personnel, insofar as the application of the doctrine of loss of trust and
confidence is concerned.
Thus, with respect to rank-and-file personnel, loss of trust and confidence, as
ground for valid dismissal, requires proof of involvement in the alleged events
in question, and that mere uncorroborated assertions and accusations by the
employer will not be sufficient. But as regards a managerial employee, the
mere existence of a basis for believing that such employee has breached the
trust of his employer would suffice for his dismissal.
Hence, in the case of managerial employees, proof beyond reasonable doubt
is not required, it being sufficient that there is some basis for such loss of
confidence, such as when the employer has reasonable ground to believe
that the employee concerned is responsible for the purported misconduct,
and the nature of his participation therein renders him unworthy of the trust
and confidence demanded of his position.