A company policy prohibiting employees from marrying employees of competitor companies, aimed at preventing conflicts of interest and protecting trade secrets, is a valid exercise of management prerogative and does not violate the equal protection clause or the right to marry, provided it is reasonable and applied impartially.

The case arose from the highly competitive pharmaceutical industry where companies like Glaxo Wellcome Philippines, Inc. (Glaxo) and Astra Pharmaceuticals (Astra) are direct competitors. Glaxo implemented a policy, reflected in its employment contracts and Employee Code of Conduct, requiring employees to disclose relationships with employees of competitor companies and, if a conflict of interest is perceived, to explore solutions including transfer or resignation. This policy was intended to safeguard Glaxo's trade secrets, marketing strategies, and other confidential information.

• Pedro A. Tecson was hired by Glaxo Wellcome Philippines, Inc. (Glaxo) as a medical representative on October 24, 1995.
• Tecson signed an employment contract agreeing to abide by company rules, including disclosing relationships with employees of competing drug companies and resigning if such a relationship posed a conflict of interest.
• Glaxo's Employee Code of Conduct similarly required disclosure and provided for transfer or preparation for outside employment if a conflict of interest was perceived.
• Tecson entered into a romantic relationship with Bettsy, an employee of Astra Pharmaceuticals (Astra), a competitor of Glaxo, who held a supervisory role as Branch Coordinator.
• Tecson married Bettsy in September 1998, despite prior reminders from his District Manager about potential conflicts of interest.
• In January 1999, Glaxo informed Tecson that his marriage created a conflict of interest and suggested one of them resign, expressing a desire to retain Tecson.
• Tecson requested time to comply, citing his wife's plan to avail of a redundancy package from Astra.
• Tecson later applied for a transfer to Glaxo's milk division, which was denied due to Glaxo's "least-movement-possible" policy.
• In November 1999, Glaxo transferred Tecson from Camarines Sur-Camarines Norte to Butuan City-Surigao City-Agusan del Sur sales area. Tecson's request for reconsideration was denied.
• Tecson defied the transfer order and continued working in his original sales area.
• During grievance proceedings, Tecson was paid his salary but was not issued samples of products competing with Astra's and was not included in related product conferences.
• The matter was submitted to voluntary arbitration; Glaxo offered Tecson separation pay, which he declined.
• The National Conciliation and Mediation Board (NCMB) ruled Glaxo's policy valid and affirmed its right to transfer Tecson.
• The Court of Appeals affirmed the NCMB decision.

• Glaxo's policy prohibiting employees from marrying an employee of a competitor company is invalid.
• The policy violates the equal protection clause of the Constitution by creating invalid distinctions among employees based solely on marriage.
• The policy restricts the employees' right to marry.
• Tecson was constructively dismissed due to his transfer to a new sales territory, alleged diminution in pay, exclusion from seminars and training, and prohibition from promoting certain products.

• The company policy is a valid exercise of management prerogatives and does not violate the equal protection clause.
• The policy aims to protect genuine business interests, such as trade secrets, procedures, and policies, from competitors in the highly competitive pharmaceutical industry.
• The policy does not prohibit marriage per se but proscribes relationships with employees of competitor companies that pose a conflict of interest.
• Tecson was aware of the policy when he signed his employment contract and is therefore estopped from questioning it.
• Tecson's reassignment did not amount to constructive dismissal; it was a measure to avoid conflict of interest and considered Tecson's family welfare (transfer to his home province).
• Tecson's exclusion from a seminar concerned a product directly competing with Astra's, thus posing a conflict of interest.
• Delay in receiving sales paraphernalia was due to a mix-up caused by Tecson's refusal to transfer.

• Whether Glaxo's policy prohibiting its employees from marrying employees from competitor companies is valid and does not violate the equal protection clause of the Constitution.
• Whether Tecson was constructively dismissed.

• The Supreme Court denied the petition for lack of merit.
• Glaxo's policy prohibiting an employee from having a relationship with an employee of a competitor company is a valid exercise of management prerogative, as Glaxo has a right to protect its trade secrets, manufacturing formulas, marketing strategies, and other confidential information from competitors.
• The policy is reasonable as relationships of such nature might compromise the company's interests by potentially allowing a competitor access to its secrets and procedures.
• The policy does not violate the equal protection clause, as this clause is addressed to the state or those acting under its authority, not to private conduct, unless the state is entwined in the wrongful private conduct, which is not the case here. The policy was applied impartially.
• The policy does not impose an absolute prohibition against marriage; employees are free to marry, but the company seeks to avoid conflicts of interest arising from such relationships.
• Tecson was aware of the policy when he signed his employment contract and is estopped from questioning it, as the contract stipulations have the force of law between the parties.
• Tecson was not constructively dismissed. His transfer was a valid exercise of management prerogative to avoid a conflict of interest, especially given his wife's supervisory role at a competitor and the proximity of their sales territories.
• There was no demotion, diminution in pay, or undue discrimination. Glaxo gave Tecson opportunities to resolve the conflict and even considered his family's welfare in the transfer.

• Management Prerogative — The inherent right of an employer to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers and discipline, dismissal and recall of workers. The Court held that Glaxo's policy prohibiting relationships with employees of competitor companies to avoid conflicts of interest and protect trade secrets is a valid exercise of this prerogative.
• Equal Protection Clause (Non-Applicability to Private Conduct) — This constitutional guarantee, primarily found in the Fourteenth Amendment of the U.S. Constitution and mirrored in the Philippine Constitution, provides that no person or class of persons shall be denied the same protection of the laws which is enjoyed by other persons or other classes in like circumstances. The Court reiterated that the commands of the equal protection clause are addressed only to the state or those acting under color of its authority and generally do not shield against merely private conduct, however discriminatory or wrongful, unless the state is significantly involved in such private conduct. In this case, Glaxo's policy was deemed private conduct not subject to this clause.
• Estoppel — A legal principle that precludes a person from asserting something contrary to what is implied by a previous action or statement of that person or by a previous pertinent judicial determination. The Court found Tecson estopped from questioning the company policy because he was aware of it when he signed his employment contract, which included a stipulation to abide by such rules.
• Pacta Sunt Servanda (Obligation of Contracts) — Latin for "agreements must be kept," this principle means that contracts are binding on the parties and must be performed in good faith. The Court stated that since Tecson knowingly and voluntarily entered into the employment contract, its stipulations have the force of law between him and Glaxo and should be complied with in good faith.
• Constructive Dismissal — An involuntary resignation resorted to when continued employment becomes impossible, unreasonable, or unlikely; when there is a demotion in rank or diminution in pay; or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee. The Court found no constructive dismissal as Tecson's transfer was a legitimate exercise of management prerogative to avoid conflict of interest, without demotion or undue discrimination.
• Protection of Trade Secrets — The right of a business to protect its confidential information, formulas, practices, designs, instruments, or a compilation of information which is used in its business and which gives it an opportunity to obtain an advantage over competitors who do not know or use it. The Court recognized Glaxo's right to guard its trade secrets as a legitimate business interest supporting its policy.

• "No reversible error can be ascribed to the Court of Appeals when it ruled that Glaxo's policy prohibiting an employee from having a relationship with an employee of a competitor company is a valid exercise of management prerogative."
• "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."
• "The policy being questioned is not a policy against marriage. An employee of the company remains free to marry anyone of his or her choosing. The policy is not aimed at restricting a personal prerogative that belongs only to the individual. However, an employee's personal decision does not detract the employer from exercising management prerogatives to ensure maximum profit and business success."
• "Since Tecson knowingly and voluntarily entered into a contract of employment with Glaxo, the stipulations therein have the force of law between them and, thus, should be complied with in good faith. He is therefore estopped from questioning said policy."
• "By the very nature of his employment, a drug salesman or medical representative is expected to travel. He should anticipate reassignment according to the demands of their business."

• Emory v. Georgia Hospital Service Association (1971) — Cited as a U.S. case holding it a legitimate business practice to guard business confidentiality and protect a competitive position by disqualifying employees married to a competitor, noting the policy was applied equally and the business was highly competitive.
• Abbott Laboratories (Phils.), Inc. v. National Labor Relations Commission (G.R. No. L-76959, October 12, 1987) — Referenced to uphold the right of a drug company to transfer or reassign its medical representatives in accordance with operational demands, as travel and reassignment are inherent in such roles.
• Sta. Catalina College v. National Labor Relations Commission (G.R. No. 144483, November 19, 2003) — Cited for the principle that while laws protect labor, management also has rights entitled to respect and enforcement for fair play.
• Avery v. Midland County; Cooper v. Aaron; District of Columbia v. Carter; Moose Lodge No. 107 v. Irvis; United States v. Price; Burton v. Wilmington Parking Authority; Shelley v. Kraemer; United States v. Classic; Nixon v. Condon; Iowa-Des Moines Nat. Bank v. Bennet; Corrigan v. Buckley; Adickes v. S. H. Kress & Co. — Collectively cited as U.S. Supreme Court decisions establishing that the equal protection clause erects no shield against merely private conduct, however discriminatory or wrongful, unless the state is significantly involved.
• Gilmore v. Montgomery; Evans v. Newton; Anderson v. Martin; Peterson v. Greenville — Cited in relation to the exception where the state becomes entwined or involved in wrongful private conduct, making the equal protection clause applicable.
• National Sugar Trading and/or the Sugar Regulatory Administration v. Philippine National Bank; Pilipinas Hino, Inc. v. Court of Appeals — Cited in support of the binding force of contracts (Article 1159, Civil Code).
• Leonardo v. National Labor Relations Commission (G.R. Nos. 125303, and 126937, June 16, 2000) — Cited for the definition of constructive dismissal.

• Section 3, Article XIII of the Constitution — Provides that "The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns on investments, and to expansion and growth." Cited to support Glaxo's right to protect its economic interests and enforce policies for reasonable returns and growth.
• Article 1159, Civil Code — States that "Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith." Cited to emphasize that Tecson, having knowingly entered into the employment contract, is bound by its stipulations, including the policy on relationships with competitor employees.
• Title VII of the Civil Rights Act of 1964 (42 USCS §§2000e–2002e–17) — Mentioned in relation to the U.S. case Emory v. Georgia Hospital Service Association, noting that the employer's policy did not violate this Act which prohibits discrimination based on race, color, religion, sex, or national origin. The Court noted there is no similar legislation in the Philippines in this specific context.
• Fourteenth Amendment of the U.S. Constitution (Equal Protection Clause) — Referenced in discussions about the equal protection clause, noting its restriction on state governments and its general inapplicability to private conduct.