[G.R. No. 160694. January 21, 2004]

vs. CA



Quoted hereunder, for your information, is a resolution of this Court dated JAN 21 2004.

G.R. No. 160694 (Davidson H. Flores vs. Court of Appeals, Hon. Judge Marissa Macaraig-Guillen, Br. 61, RTC of Makati, Eco-Triangle Technologies, Inc.)

This treats of the Petition for Review on Certiorari dated November 21, 2003 filed by Davidson Flores ("Flores") seeking to set aside the Decision dated October 24, 2002 and Resolution dated October 10, 2003 of the Court of Appeals dismissing for lack of merit the petitioner's Petition for Review on Certiorari and Prohibition with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction.

The facts are summarized as follows:

Eco-Triangle Technologies, Inc. ("Eco-Triangle") filed a complaint for damages against Flores with the Regional Trial Court ("RTC") of Makati City, Branch 61. The complaint, anchored on Articles 19 and 21 of the Civil Code, alleged, among others, that Flores was employed by Eco-Triangle as Sales Supervisor; as such, he was entrusted with responsibilities concerning sales operations and was subsequently promoted to Senior Sales Supervisor and eventually, to Assistant Sales Manager; over the years, Flores became the most trusted person of the Managing Director of Eco-Triangle; as Assistant Sales Manager, Flores was entrusted with sensitive and confidential information such as the list of Eco-Triangle's suppliers, customers and prices; in August 1998, Eco-Triangle's Managing Director went on study leave and in his absence, entrusted the sales department to Flores; Flores entered into a covert agreement with Gouldstar, Eco-Triangle's former supplier, to engage in business in direct competition with Eco-Triangle; in breach of the trust and confidence reposed on him by Eco-Triangle, Flores took advantage of the absence of the Managing Director to sabotage Eco-Triangle's business and, in connivance with Gouldstar, diverted the sales of Eco-Triangle to Gouldstar; Flores spread rumors against Eco-Triangle with the intended result of fomenting discontent and lowering the morale of the latter's employees; he enticed Eco-Triangle's sales personnel to join him in diverting sales to Gouldstar; and discouraged Eco-Triangle's customers from further dealing with it by ordering his subordinate to send the customers price quotations that are higher than their actual prices. He then sent the same customers lower price quotations for and on behalf of Gouldstar; on December 27, 2000, Flores suddenly turned in his resignation letter stating that his resignation was effective on December 31, 1999; Flores did not report for work anymore after submitting said letter; as a result of his abrupt resignation without a proper turn over, Eco-Triangle's sales department was left in disarray resulting in the cancellation of orders by its customers; it was discovered that stocks worth P500,000.00 purchased by Eco-Triangle upon Flores' request were left unsold and idle in the former's warehouse; Flores spread lies among the customers and suppliers of Eco-Triangle which tarnished the latter's goodwill and reputation; he also attempted to paralyze Eco-Triangle's sales force by urging its sales personnel to be disloyal, to resign and to join him.

Flores filed a Motion to Dismiss on the ground of lack of jurisdiction claiming that since the complaint stemmed from the employer-employee relations between the parties, the labor arbiter had jurisdiction. The RTC denied the Motion to Dismiss for lack of merit. It likewise denied Flores' Motion for Reconsideration. Hence, he filed a Petition for Review on Certiorari and Prohibition with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction with the Court of Appeals.

In its assailed Decision, the appellate court declared that jurisdiction over the controversy rightfully belonged to the RTC since the claim for damages was grounded on Flores' tortuous or willful acts against Eco-Triangle. The existence of an employer-employee relationship between the parties does not divest regular courts of its jurisdiction over actions for damages. Citing jurisprudence, the Court of Appeals held that where the claim is to be resolved not by reference to the Labor Code or other labor relations statutes or a collective bargaining agreement, but to general civil law, jurisdiction over the dispute belongs to the regular courts of justice and not to the labor arbiter. The Court of Appeals denied Flores' Motion for Reconsideration in its Resolution dated October 10, 2003.

In the instant petition, Flores contends that there is a reasonable causal connection between the claim for damages and the employer-employee relationship between him and Eco-Triangle. He attempts to draw parallelisms between his case and San Miguel Corporation v. Etcuban [1] cralaw by claiming that without his resignation from the company, Eco-Triangle's complaint for damages will not prosper. Hence, the labor arbiter has jurisdiction.

His argument does not hold sway. As correctly noted by the appellate court, the ruling in San Miguel Corporation v. Etcuban does not apply squarely in view of the facts obtaining in the instant case. San Miguel Corporation v. Etcuban involved an action for damages seeking the nullification of the collective contracts of termination between the former employees of San Miguel Corporation ("SMC") and the latter because of fraud on the part of SMC. Therein, we held that the labor arbiter has jurisdiction because the damages incurred by the employees are merely the civil aspect of the injury brought about by their illegal dismissal. More importantly, we noted that, in order to be cognizable by the labor arbiter, the claim for damages arising from employer-employee relations under paragraph 4, Article 217 of the Labor Code must have a reasonable causal connection with any of the claims provided for in that article. [2] cralaw Only if there is such a connection with the other claims can the claim for damages be considered as arising from employer-employee relations. [3] cralaw

In the instant case, the damages claimed by Eco-Triangle do not have a reasonable causal connection with any of the claims enumerated under Article 217 of the Labor Code. The allegations in the complaint unequivocally reveal that the action was based on Articles 19 and 21 of the Civil Code and does not involve the adjudication of a labor dispute. Plainly, the employer-employee relationship between Eco-Triangle and Flores is merely incidental and does not negate the jurisdiction of the trial court.

As lucidly held in Georg Grotjahn GMBH & Co. v. Isnani: [4] cralaw

Not every dispute between an employer and employee involves matters that only labor arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the Labor Code, other labor statutes, or their collective bargaining agreement. [5] cralaw

In view of the foregoing, we find that the Court of Appeals did not commit a reversible error in issuing the assailed Decision and Resolution.

WHEREFORE, the instant petition is denied.

Very truly yours,


Asst. Div. Clerk of Court


[1] cralaw G.R. No. 127639, December 3, 1999, 319 SCRA 704.

[2] cralaw E .g., unfair labor practice cases; termination disputes; if accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment; cases arising from any violation of Article 264 of the Labor Code including questions involving the legality of strikes and lockouts; and except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding P5,000.00 regardless of whether accompanied with a claim for reinstatement.

[3] cralaw Citing Dai-ichi Electronics Manufacturing Corp. v. Villarama, Jr., 238 SCRA 267 (1994).

[4] cralaw G.R. No. 109272, August 10, 1994, 235 SCRA 216.

[5] cralaw Id . at 221.

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