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Duncan Association of Detailman-PTGWO vs. Glaxo Phils.

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

Facts:

Pedro A. Tecson was hired by Glaxo Wellcome Philippines, Inc.) as medical representative on October
1995, after Tecson had undergone training and orientation. 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. The Employee Code of Conduct of Glaxo similarly provides
that if management perceives a conflict of interest or a potential conflict between such relationship and
the employees 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 Glaxos products in the Camarines Sur-Camarines Norte sales
area. Subsequently, Tecson entered into a romantic relationship with Bettsy, an employee of Astra
Pharmaceuticals (Astra), a competitor of Glaxo. Bettsy was Astras Branch Coordinator in Albay. Despite
of warnings, Tecson married Bettsy. The superiors of Tecson reminded him of the company policy and
suggested that either him or Bettsy shall resign from their respective companies. Tecson requested
more time to resolve the issue. In November of 1999, Glaxo transferred Tecson to Mindanao area
involving the provinces of Butuan, Surigao and Agusan del Sur. Tecson did not agree to the reassignment
and referred this matter to the grievance committee. It was resolved and was submitted to voluntary
arbitration.

Issue:

Is the policy of a pharmaceutical company prohibiting its employees from marrying employees of any
competitor company valid?

Ruling:

Glaxos 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.

The prohibition against personal or marital relationships with employees of competitor companies upon
Glaxos 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 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.

Star Paper Corp. vs. Simbol [G.R. No. 164774. April 12, 2006] Facts: Star Paper Corporation is engaged in
trading of paper products. The company policies stated that: New applicants will not be allowed to be
hired if in case he/she has [a] relative, up to [the] 3rd In case of two of our employees (both single,
one male and another female) developed a friendly relationship during the course of their employment
and then decided to get married, one of them should resign to preserve the policy stated above. degree
of relationship, already employed by the company. The complainants alleged that when they married
co-employees, they were compelled to resign because of the company policy. Arguing that said policy is
illegal, they lodged a complaint for illegal dismissal and unfair labor practice. Issue: whether the policy of
the employer banning spouses from working in the same company violates the rights of the employee
under the Constitution and the Labor Code or is a valid exercise of management prerogative Held: The
case at bar involves Article 136 of the Labor Code which provides: It shall be unlawful for an employer to
require as a condition of employment or continuation of employment that a woman employee shall not
get married, or to stipulate expressly or tacitly that upon getting married a woman employee shall be
deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a
woman employee merely by reason of her marriage. Two types of employment policies involve
spouses: no-spouse employment policies - policies banning only spouses from working in the same
company anti-nepotism employment policies - those banning all immediate family members, including
spouses, from working in the same company In the US, there is what they call as bona fide occupational
qualification exception, that is, unless the employer can prove that the reasonable demands of the
business require a distinction based on marital status and there is no better available or acceptable
policy which would better accomplish the business purpose, an employer may not discriminate against
an employee based on the identity of the employees spouse. And to justify a bona fide occupational
qualification, the employer must prove two factors: (1) that the employment qualification is reasonably
related to the essential operation of the job involved; and (2) that there is a factual basis for believing
that all or substantially all persons meeting the qualification would be unable to properly perform the
duties of the job. In the Philippines we employ the standard of reasonableness of the company policy
which is parallel to the bona fide occupational qualification requirement. This was illustrated in the
cases of Duncan Association of Detailman vs. Gaxo Wellcome (2004) and PT&T v. NLRC (1997). These
cases instruct us that the requirement of reasonableness must be clearly established to uphold the
questioned employment policy. The employer has the burden to prove the existence of a reasonable
business necessity. In the case at bar, there is no a reasonable business necessity. The employees were
hired after they were found fit for the job, but were asked to resign when they married a co-employee.
Star Paper failed to show how the marriages of the employees could be detrimental to its business
operations. The policy is premised on the mere fear that employees married to each other will be less
efficient.