**Yusen Air and Sea Service Philippines, Inc. v. Villamor**
## Facts:
1. **Petitioner’s Employment and Resignation**: Yusen Air and Sea Service Philippines, Inc. (Yusen), a freight forwarding company, hired Isagani A. Villamor (Villamor) as Branch Manager in Cebu on August 16, 1993. Later, Villamor’s role was reclassified to Division Manager, which he held until his resignation on February 1, 2002.
2. **Post-Resignation Employment**: Shortly after resigning from Yusen, Villamor joined Aspac International, a competitor in the same industry.
3. **Legal Action by Petitioner**: On February 11, 2002, Yusen filed a complaint for injunction and damages, with a request for a temporary restraining order (TRO), in the Regional Trial Court (RTC) of Parañaque City, Branch 258 (Civil Case No. 02-0063). Yusen claimed Villamor’s new employment breached a non-compete clause in its employee handbook, which prohibited employment with a competitor for two years post-resignation. Yusen sought to enjoin Villamor from working at Aspac International and claimed P2,000,000 in actual damages, P300,000 in exemplary damages, and another P300,000 in attorney’s fees.
4. **Respondent’s Legal Action**: Villamor countered by filing an illegal dismissal case against Yusen before the National Labor Relations Commission (NLRC) on March 4, 2002.
5. **Respondent’s Motion to Dismiss**: In response to Yusen’s complaint, Villamor filed a Motion to Dismiss on jurisdictional grounds, arguing that the RTC lacked jurisdiction as the case pertained to employer-employee relations, which falls under the jurisdiction of the NLRC.
6. **RTC’s Dismissal**: On March 20, 2002, the RTC agreed with Villamor and dismissed Yusen’s complaint for lack of jurisdiction, referring to the NLRC’s exclusive jurisdiction over disputes arising from employer-employee relations as per Article 217 of the Labor Code.
7. **Petitioner’s Motion for Reconsideration**: Yusen’s Motion for Reconsideration was denied by the RTC on June 21, 2002.
8. **Petition to the Supreme Court**: Subsequently, Yusen filed a petition for review on certiorari under Rule 45 seeking the annulment of the RTC orders.
## Issues:
1. Whether the RTC erroneously dismissed Yusen’s complaint for lack of jurisdiction.
2. Whether the action for damages and injunction arose from employer-employee relations, thereby falling under the NLRC’s jurisdiction.
## Court’s Decision:
1. **RTC’s Jurisdiction**: The Supreme Court held that the RTC erroneously dismissed Yusen’s complaint. The Court clarified that the jurisdiction of a civil action must be determined by the allegations in the complaint. Yusen’s suit was for breach of a non-compete clause in an employment contract, a matter of civil law and not under NLRC jurisdiction.
2. **Nature of the Claim**: The Court emphasized that while the non-compete clause derived from an employer-employee relationship, the breach pertained to post-employment, thus a pure civil dispute. Citing the case of Dai-Chi Electronics Manufacturing v. Villarama, the Court posited that actions for damages due to a breach of contractual obligations do not inherently arise from employer-employee relations if they pertain to post-employment conduct.
3. **Relief Sought**: The injunction aspect was rendered moot due to the expiration of the two-year non-compete period, but the issue of damages remained relevant. The claim’s validity and potential damages rooted in contract law, thus properly within the RTC’s jurisdiction.
4. **Directive**: The Court set aside the RTC’s orders and remanded the case for trial on the merits.
## Doctrine:
– **Jurisdiction Based on Civil Claims Post-Employment**: Jurisprudence, as reiterated in Dai-Chi Electronics, states that claims for damages arising from breaches of contract post-employment fall within the jurisdiction of regular civil courts, not labor tribunals.
– **Jurisdiction Determination**: Jurisdiction is determined based on the allegations in the complaint, not the defenses raised.
## Class Notes:
– **Jurisdiction**: Regular courts have jurisdiction over civil disputes arising from post-employment contracts; employment tribunals have exclusive jurisdiction over active employment disputes (Art. 217 of the Labor Code).
– **Non-Compete Clauses**: Enforceable within two years post-employment if validly stipulated in employment contracts.
– **Injunctions**: Temporary remedy to prevent irreparable harm pending trial, becomes moot if the prohibited period elapses.
## Historical Background:
– **Labor Code Provisions**: Article 217 of the Labor Code initially framed the jurisdiction of labor disputes, but amendments and evolving jurisprudence have clarified that civil courts retain jurisdiction over post-employment contract enforcement.
– **Dai-Chi Electronics Case Reference**: This case set a precedent on the boundary between labor and civil adjudication in disputes about non-compete clauses.
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