Reasonable Business Necessity (Marriage)

Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc. (G.R. No. 162994; September 17, 2004)

In this case, the prohibition against marriage embodied in the following stipulation in the employment contract was held as valid:

“10. You agree to disclose to management any existing or future relationship you may have, either by consanguinity or affinity with co-employees or employees of competing drug companies. Should it pose a possible conflict of interest in management discretion, you agree to resign voluntarily from the Company as a matter of Company policy.”

The Supreme Court ruled that the dismissal based on this stipulation in the employment contract is a valid exercise of management prerogative. The prohibition against personal or marital relationships with employees of competitor companies upon its employees was held reasonable under the circumstances because relationships of that nature might compromise the interests of the company. In laying down the assailed company policy, the employer only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures.
Below the Supreme Court is quoted:

No reversible error can be ascribed to the Court of Appeals when it ruled that 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.

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