[G.R. No. 162994.

  September 19, 2005]

DUNCAN ASSOCIATION vs. GLAXO

SECOND DIVISION

Sirs/Mesdames:

Quoted hereunder, for your information, is a resolution of this Court dated SEP 19 2005.

G.R. No. 162994 (Duncan Association Of Detailman-PTGWO and Pedro A. Tecson vs. Glaxo Wellcome
Philippines, Inc.)

For resolution is a Motion for Reconsideration dated 8 October 2004, filed by petitioners who seek the
reversal of the Court's Resolution1 dated 17 September 2004 denying the instant Petition for Review.

A brief recapitulation of the facts is in order. Petitioner Pedro Tecson ("Tecson") was employed in 1995 by
respondent Glaxo Wellcome Philippines, Inc. ("Glaxo") as a medical representative. He was assigned to
market Glaxo's products in the Camarines Sur-Camarines Norte sales area. Upon his employment, Tecson
signed an employment contract, wherein he agreed, among others, 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; and if management found that such relationship
posed a possible conflict of interest, to resign from the company.

Nonetheless, Tecson became romantically involved with Bettsy, an employee of a rival pharmaceutical firm
Astra Pharmaceuticals ("Astra"). The two eventually married in September of 1998. The relationship,
including the subsequent marriage, was cause for consternation to Glaxo. On January 1999, Tecson's
superiors informed him that his marriage to Bettsy had given rise to a conflict of interest. Negotiations
ensued, with Tecson adverting to his wife's possible resignation from Astra, and Glaxo making it known that
they preferred to retain his services owing to his good performance. Yet no resolution came to pass. In
September 1999, Tecson applied for a transfer to Glaxo's milk division, but his application was denied in
view of Glaxo's "least-movement-possible" policy. Then in November 1999, Glaxo transferred Tecson to the
Butuan City-Surigao City-Agusan del Sur sales area. Tecson asked Glaxo to reconsider its decision, but his
request was denied.

The matter was then brought to the Glaxo Grievance Committee, and subsequently to a voluntary arbitrator.
On 15 November 2000, the National Conciliation and Mediation Board (NCMB) rendered
its Decision declaring as valid Glaxo's policy on relationships between its employees and persons employed
with competitor companies, and affirming Glaxo's right to transfer Tecson to another sales territory.
This Decision was assailed by petitioners before the Court of Appeals and this Court, but for naught.

The present Motion for Reconsideration advances four main arguments: that the Court erroneously relied on
a conjectural presumption that Tecson's relationship might compromise the interest of the company or allow
a competitor to gain access to Glaxo's secrets and procedures; that Glaxo's policy regarding the marriage of
its employees to employees of rival companies is contrary to public policy, morals and good customs; that
Glaxo violated its own policy which authorized the transfer of the subject employee to another department
when it denied Tecson's application to transfer to the milk division; and that Tecson was constructively
dismissed when he was transferred to the Butuan City-Surigao City-Agusan del Sur sales area.

One of the central anchors of the assailed Resolution was the holding that Glaxo's policy on marriage did not
violate the equal protection clause of the Constitution, 2 as the constitutional guarantee does not encompass
discriminatory behavior engaged by private individuals. 3 Petitioners do not challenge this holding of the
Court, and we see no reason to revisit this issue.

But before we engage in a renewed discussion on the validity of Glaxo's policy itself, we should examine the
claim that Tecson was constructively dismissed. After all, assuming that the policy itself were declared
invalid, a finding nonetheless that Tecson was not constructively dismissed would still render this petition
futile. The Court has ruled Tecson was not actually dismissed, and the Motion for Reconsideration adduces
no substantial reasons why this holding should be reversed.

The Resolution cited Abbott Laboratories (Phils.), Inc. v. NLRC4 wherein the Court upheld the prerogative of
a drug company to reassign a medical representative under its employ to a new territory. In the same vein,
the Court has consistently affirmed as a valid prerogative of the employer the reasonable reassignment or
transfer of an employee. As held in Philippine Japan Active Carbon Corp. v. NLRC:5

It is the employer's prerogative, based on its assessment and perception of its employees' qualifications,
aptitudes, and competence, to move them around in the various areas of its business operations in order to
ascertain where they will function with maximum benefit to the company. An employee's right to security of
tenure does not give him such a vested right in his position as would deprive the company of its prerogative
to change his assignment or transfer him where he will be most useful. When his transfer is not
unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or a
diminution of his salaries, benefits, and other privileges, the employee may not complain that it amounts to
a constructive dismissal.6

In Philippine Telegraph and Telephone Corp. v. Laplana,7 the Court again upheld the prerogative of
management to reassign an employee to a different locality, despite the "personal inconvenience or hardship
that will be caused to the employee by reason of the transfer."

Tecson was not relieved of his employment with Glaxo. Neither was he transferred to a different position of
lower rank or remuneration. The alleged constructive dismissal pertained to his transfer to Butuan from
Naga City, a reassignment that would fall within the ambit of management's prerogative to transfer
employees.

Petitioners, in their Motion for Reconsideration, purport that constructive dismissal was proved by the
allegation that Tecson's commissions for January and February were withheld from him, and that he was
forced to surrender his sales paraphernalia. Yet the veracity of these factual allegations were not
acknowledged by either the voluntary arbitrator or the Court of Appeals. This Court, which is not a trier of
facts, could not very well at this late stage reverse the established factual conclusions on the basis of mere
allegations which have not been previously substantiated but which in fact have been consistently rebutted
by the respondents.8

In case of a constructive dismissal, the employer has the burden of proving that the transfer and demotion
of an employee are for valid and legitimate grounds, i.e., that the transfer is not unreasonable,
inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his
salaries, privileges and other benefits. 9 In this case, Glaxo did not opt to terminate or demote Tecson, but
transferred him to a sales region that included the respective home provinces of himself and his wife, and
offered monetary assistance to shoulder his family's relocation. 10. Certainly, the choice of location was not
selected with petty malice aforethought, but even designed for the easier palatability of the employee.

The fact that the employee may be displaced from established roots by reason of the transfer is not
sufficient to deny the valid management prerogative to transfer its employees. Tecson himself had
acknowledged this prerogative when he signed the contract of employment which expressly agreed "to be
assigned any work or work station for such periods as may be determined by the company and whenever
the operations require such assignment."

This finding that Tecson was not actually dismissed is determinative of this case, especially considering that
his transfer by Glaxo from Naga to Butuan would have been a valid exercise of an employer's prerogative,
whether or not the company policy on marriage subsists. Nonetheless, it would be specious to assume that
Tecson's transfer had nothing to do with his marriage to an employee from a rival drug company. Moreover,
questions on the validity, if not appropriateness of Glaxo's policy itself, has attracted comment on the
various triers of this case, as well as the public at large.

May an employer impose conditions, restrictions or consequences on an employee by reason of the latter's
choice to marry or choice of spouse? The answer would really all depend on the particular circumstances in
each case.
The governing legal framework should be established. Under Article 136 of the Labor Code, it is illegal for an
employer to prohibit a female employee from getting married or to actually dismiss, discharge, discriminate
or otherwise prejudice a woman employee merely by reason of her marriage. This provision addresses a
concern, particularly gender discrimination, with no direct relevance to this case. Nonetheless, it can be
invoked by a female employee who finds herself prohibited by her employer from contracting marriage, or
otherwise dismissed or discriminated upon by reason of her marriage, and the employer faces the
unenviable burden of establishing the inapplicability of Article 136.11

Of more general application is Article 282 of the Labor Code, which governs the termination by employers
for "just causes." Had Tecson been actually terminated in this case, Article 282 would have necessarily
found application, since Articles 282 to 284 stand as the only basis in law for the valid termination of an
employee by an employer.12

Under Article 282, the employer may dismiss the employee for any of the following causes: (a) serious
misconduct or willful disobedience by the employee of the lawful order of his employer or representative in
connection with his work; (b) gross and habitual neglect by the employee of his duties; (c) fraud or willful
breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d)
commission of a crime or offense against the person of his employer or any immediate member of his family
or his duly authorized representative; and (e) other causes analogous to the foregoing. Assuming that there
is a company policy allowing the dismissal, constructive 13 or otherwise, of an employee by reason of the
employee's marriage or choice of spouse, such policy alone cannot justify the dismissal. The employer will
have to establish not only the existence of the policy, but the presence of any of the grounds enumerated in
Article 282. Our Constitution and Labor Code guarantee an employee's security of tenure. For regular
employees as defined under the Labor Code, security of tenure is assured by the prohibition against
termination except for the causes enumerated under Articles 282 to 284.

Thus, the validity of a company policy on marriage such as that maintained by Glaxo would not necessarily
be determinative of the question of whether an employee who violated such policy may be terminated. Still,
there may be instances wherein the validity of the policy, whether standing by itself or as incorporated into
an employment contract, would be the decisive factor. Such may arise if for example, the employee is
sought to be dismissed on the ground of loss of confidence, 14 and such loss of confidence developed due to
the marriage to an employee from a rival company. In such cases wherein it is necessary to pass judgment
on the employer's policy itself, the following points should be considered.

Both the Constitution and our body of statutory laws accord special status and protection to the contract of
marriage. Our Constitution recognizes that "marriage, as an inviolable social institution, is the foundation of
the family, and shall be protected by the State," 15 and our Family Code acknowledges that marriage is "a
special contract of permanent union ... an inviolable social institution whose nature, consequences and
incidents are governed by law."16 It may be debatable whether these provisions, by themselves, may be
the source of operative and executory rights, but at the very least, they establish a pervasive public policy
that frowns upon acts that encumber any person's freedom to marry.

Moreover, if such encumbrance is contained in an employment contract, the stipulation can be declared void
under Article 1409(1) of the Civil Code, which provides that a contract whose cause, object or purpose is
contrary to law, morals, good customs, public order or public policy is inexistent and void from the
beginning.17 The standard is of great utility, as it allows a measure of relief for persons laboring under
private contractual obligations that, while insusceptible to the traditional constitutional challenge under the
Bill of Rights, nonetheless stand as onerous to the obligor and noxious to our general body of laws.

Still, it would be injudicious, if not irresponsible, to judicially enforce a universal position that disencumbers
marriage from adverse consequences, if the encumbrance stands to protect third persons inevitably affected
by an act of marital union. For much as we may want to see and regard marriage in a vestal state, it may be
a source of negativity for third persons, and not just the jilted. This is apparent even on the most visceral
level, as anybody who dislikes an immediate family member's choice of bride or groom can attest to. The
statutory protections accorded to marriage do not translate to a legal compulsion on people to favor another
person's choice in spouse.

The thesis is harmless enough if the consequence of such disapproval extends merely into the personal
sphere and not the legal. Yet, such as in this case, the consequences may be economic as well. For
example, an aunt who voluntarily extends regular financial benefits to a nephew may refuse to continue the
doleout by reason of the relative's marriage or choice of wife. In such a case, the nephew would have no
cause of action to compel his aunt to continue the remuneration, even if the aunt's reasons for disliking the
new wife are noxious, such as bigotry. The invocation of the inviolability of marriage or its protection under
law will not suffice to legally compel the aunt to extend her largesse to her nephew, for this act of charity
arises solely from private volition. The State may protect marriage, but it cannot compel private persons to
give away money out of their pockets to the bride and groom.

If the prohibitions or restrictions are contained in a private employment policy or contract, the norms that
would govern their review are such as those contained in the Labor Code, and to an extent, the "public
policy" clauses of the Civil Code. 18 However, the sanctity of the marital vow should not be the only relevant
consideration at hand. The considerations which may have impelled the employer to impose such conditions
on the employee's absolute right to marry warrant examination as well.

We can surmise that if the restrictions or conditions on the employee's right to marry bear no relevance to
any interests that the employer should be concerned with, then they should be voided if they are of
obligatory import. In that regard, it is difficult to foresee an instance wherein an absolute prohibition on any
marriage imposed on the employees may be sanctioned.19 Even if the prohibition is premised on the belief
that a married employee would be able to devote less time to the job, whatever causal economic concerns
hardly outweigh the right of an individual to get married. Employees this day and age have long transcended
the yoke of serfdom and absolute fealty to master and the expense of the marital bind.

If the prohibition or restriction pertains to the choice of spouse, rather than the choice to marry at all, there
should be an examination of the rationale behind the constraint. Again, if the restrictions or conditions bear
no relevance to any interests that the employer should be concerned with, then they should not be upheld.
Restrictions that are nothing more than the enforcement of personal biases, such as prohibitions on
marrying members of a particular race or ethnic group, may be struck down.

Nonetheless, while generalities may be sufficient to strike down the most obnoxious of prohibitions, those
restrictions that are geared towards maintaining valid economic concerns of the employer have to be
assessed on a case to case basis. Our fundamental law respects 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.20

If the rationale in question relates to a consideration so vital to the interests of the employer as to warrant
legal protection, it should then be determined whether the means employed by the employer are reasonable
enough as to allow a measure of balance between these key interests of the employer and the fundamental
right of the employee to marry.

Let us pay particular attention to Glaxo's policy. As noted in the Resolution, Glaxo belongs to the highly
competitive pharmaceutical industry. The competitive nature of the business is further highlighted by the
fact that pharmaceutical drugs are indispensable to modern society, and that the rival companies tend to
produce drugs of like effect but marketed under respective brand names. Thus, within the pharmaceutical
industry, the hazard of industrial espionage looms largely, more so than most other competitive industries.
To that end, Glaxo is entitled to guard its trade secrets, manufacturing formulas, marketing strategies and
other confidential programs and information from competitors, concomitant to its right to protect its own
economic interests.

This in mind, it is but reasonable for Glaxo to be cautious about the social interaction of its employees with
those of companies which it directly competes with. If the employee goes as far as sharing hearth and home
with the employee of the rival company, there is greater cause of concern on the part of Glaxo. The fear
may not so much arise from the possibility of willful betrayal by its employees of trade secrets, but from the
myriad opportunities in the course of shared lives that one may inadvertently divulge to the spouse
confidential information that the rival drug company may benefit from. After all, the employer has no control
over pillow talk. Neither could it be expected that the employee maintain a higher fidelity to the employer
than to the spouse.

It may be so, as petitioners argue, much of the fear is hypothetical in nature. Yet Glaxo, as with any other
industry, is allowed to take reasonable steps in order to prevent potential damage from becoming actual,
especially if the economic consequences are substantial. Glaxo is hardly a small-scale industry, and the
pharmaceutical business seldom characterized by old-fashioned rectitude.

Still, these concerns aside, the steps that Glaxo may employ to avoid the undue divulgence of its trade
secrets should be within reason. If termination is to be considered as an option, it should be only as a final
resort, if there is no other way to avoid the conflict of interest.

In this case, Glaxo's assailed policy does not call for automatic termination, providing as it does a process
that allows for all the opportunities for a mutually agreeable solution. Per the Employee Handbook, "every
effort shall be made, together by management and the employee, to arrive at a solution within six (6)
months, either by transfer to another department in a non-counter checking position, or by career
preparation toward outside employment after Glaxo Wellcome. Employees must be prepared for possible
resignation within six (6) months, if no other solution is feasible." 21

This procedure is extremely reasonable under the circumstances, and we have no problems in upholding its
validity. As noted in the Resolution: "[i]n 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." 22 It recognizes the concern arising from the
possible conflict of interest, yet dissuades the enforcement of a hasty, unilateral solution. It appears from
the record of this case that such a procedure was adopted in good faith by both parties. Tecson may find
fault with the fact that Glaxo refused his request for transfer to the milk division, a step which, if resorted
to, may have resolved the perceived conflict of interest. Yet the procedure involved allows the transfer only
if mutually agreed upon, and besides, employees cannot generally compel the employer to transfer them
from one division to another, this being a management prerogative.

And finally, if no mutual resolution is arrived at, termination and voluntary resignation remain as viable
options. Neither obtained in this case, and we have already ruled that the transfer was valid and did not
constitute constructive dismissal. If Glaxo, or any employer with a similarly drawn-out procedure, were to
ultimately resort to termination, the burden would still fall upon it to establish that such termination is in
accordance with the just causes as provided in Article 282 of the Labor Code. Without such linkage, the
termination would be invalid.

The fact that there was no actual termination in this case obviates the need for us to further apply Article
282 or the jurisprudential rules on illegal termination to this case.

Still, should Glaxo retain the said policy, and another employee trek the same trail as Tecson did, it cannot
be foreordained that the Court would similarly rule for Glaxo and against the said employee. As repeatedly
emphasized, it all depends on the particular circumstances of each case. And ultimately, if dismissal,
constructive or otherwise, is resorted to, the standards for termination set by the Labor Code must still be
complied with.

WHEREFORE, petitioner's Motion for Reconsideration is DENIED WITH FINALITY.