Can a company prohibit its employee from marrying an employee from a competitor company?
Yes. A company, in the exercise of its management prerogative, can prohibit its employees from marrying employees of any competitor company. This is based on the fact that a company has the right to guard its trade secrets and protect its economic interests. This was enunciated in the case of Duncan Association vs. Glaxo Welcome, G.R. No. 162994, 17 September 2004, where the Supreme Court ruled:
“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.
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 Glaxo’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, 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.”
18 March 2025
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