EMPLOYMENT DISMISSAL: In this scenario, an employer seeks to take reprisal action against RETAINER CLIENT: The problem involves
problem involves the evaluation and acceptance of a case from a client that pays
Hermione, an International School Teacher in Baguio (IS Baguio) who has raised legitimate
questions about the employment practices of the employer. The questions concerned the legality
of granting locally-hired teachers terms and conditions of employment that are inferior to those
extended to foreign-hired teachers.
Hermione’s boyfriend, Malfoy, is a Senior Associate at Potter’s law firm which is the retained
counsel of IS Baguio.
 Examine the validity of the intended action in light of the provisions of the Labor Code
and to evaluate the ethical issues arising from implementing the reprisal action.
 Can Malfoy continue to advise Hermione concerning the equal work but unequal pay
practices of IS Baguio?
 Can Malfoy represent Hermione as a personal client in the threatened disciplinary action
against her by IS Baguio, which is a retainer client of IS Baguio?
- Malfoy takes the position that he has not rendered any service for IS Baguio which has
consulted exclusively with Partner Dumbledore of Potter’s law firm, hence has no access to any
confidential information of IS Baguio that he could unfairly use against it in the threatened
disciplinary proceeding against Hermione.
- On the part of Partner Dumbledore, he has to contend with the question whether
Malfoy's conduct in raising questions about IS Baguio’s equal work but unequal pay practices can
be considered a form of misconduct that can subject her disciplinary action, possibly including
dismissal.
- The partners of Potter’s law firm also had to grapple with the question whether (i) it is in
a conflict of interest situation considering that Malfoy, a Senior Associate of the firm, had advised
Hermione on legal issues concerning IS Baguio’s employment practices and (ii) asking Malfoy to
resign from the firm or dismissing him if he refused will avoid any conflict of interest situation.
References:
 Code of Professional Responsibility; Canon 7-9
 Conflict of Interest Rule
 Articles 260 to 262-B; Articles 278 to 286, Labor Code of the Philippines
a law firm a monthly retainer fee for day-to-day counseling and “availability”. While ordinarily a lawyer will or
should not accept a case which on the basis of his honest evaluation has no chance of winning and one
that a client should amicably settle, a lawyer or a law firm under a retainer agreement with a client is under
a strong compulsion to accept it. This is a situation peculiar in the Philippines. Although a standard retainer
agreement usually contains a clause that the lawyer or law firm reserves “the right to make our own
assessment of cases and/or matters referred to us for purposes of determining the proper disposition of the
referral”, the lawyer is usually hard put to reject a case referral despite an unfavorable assessment of the
merits of the case.
The case arose from a complaint filed by Batman Ventures Corporation (“BVC”) against Superman Glue
Corporation (“SGC”) for damages as a result of a fire that started in the premises of the latter corporation
and spread to the neighboring compound of the former.
The fire gutted not only the principal office of BVC but likewise the adjoining building of BVC. The principal
issue is whether the cause of the fire was the spontaneous combustion of nitrocellulose which BVC claims
was stored in the premises of SGC at the time of the fire. SGC was then engaged in the manufacture of
leather dressings and leather varnishes which require the use of nitrocellulose. SGC, however, denied the
presence of nitrocellulose at the time of the fire and contended that the cause was of “undetermined origin”,
probably due to an electrical short circuit.
Assume that you will be the lawyer for SGC. Based upon your careful evaluation of the facts of the case
and interview of the witnesses, it is your considered opinion that BVC has a good cause of action against
SGC and the facts alleged in the complaint are true. Prepare yourself to discuss the difficulties you may
encounter during your representation of SGC in the case, including the application of the doctrine of res
ipsa loquitur (Since the fire occurred in SGC’s premises, which was at all times under its complete control
and supervision, the reasonable presumption is that SGC was negligent and was at fault.)
Mr. Clark, SGC’s President & CEO, admits that the cause of the fire was the explosion of the drum
containing nitrocellulose but settlement of the case is out of the question, what should you do? If your law
firm rejects the case, your law firm stands to lose a monthly retainer fee of P100,000 plus, of course, the
additional billable hours to be generated from the handling of the case.
In handling the trial, will you present witnesses whom you know will not be telling the truth? Will you cross-
examine witnesses of BVC to destroy their credibility despite your knowledge that they are telling the truth?
References:
 Article 2176, Civil Code of the Philippines
 Code of Professional Responsibility – Canon 1, Rule 1.03, Rule 1.04; Canon 10, Rule 10.01;
Canon 15; Canon 19, Rule 19.01.