Pedro signed a contract of employment with XYZ Corp. 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 and should management find that such relationship poses a possible conflict of interest, to resign from the company.

The Employee Code of Conduct of XYZ Corp. similarly provides that an employee is expected to inform management of any existing or future relationship by consanguinity or affinity with co-employees or employees of competing drug companies. If management perceives a conflict of interest or a potential conflict between such relationship and the employee’s 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.

Pedro met Maria. Maria works for ABC Corp., a company that directly competes with XYZ Corp. They fell in love. Eventually, they got married.

Pedro tried to reach a compromise with management regarding his decision. No such compromise was reached. Pedro’s employment was terminated.

Was XYZ Corp. justified in terminating Pedro’s employment?

Yes. XYZ Corp. 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 XYZ’s 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, XYZ only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures.

• Duncan Association of Detailman-PTGWO anf Pedro A. Tecson vs. Glaxo Wellcime Philippines, Inc. G.R. No. 162994. September 17, 2004