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

FACTS: 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;, 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-
Triangles suppliers, customers and prices; in August 1998, Eco-Triangles 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-Triangles 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-Triangles business and, in
connivance with Gouldstar, diverted the sales of Eco-Triangle to Gouldstar;

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.

1. Whether or not the Labor Arbiter has jurisdiction over the instant case.

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]
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]
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]

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]