Resignation Amid Conflict of Interest Allegations: Can Your Employer File a Case? (Philippines)

Executive summary

Yes. In the Philippines, an employee’s resignation does not erase potential liability for conflict-of-interest (COI) acts committed while employed. Depending on the facts, an employer may (1) continue or initiate administrative proceedings (e.g., for loss of trust, policy breaches), (2) sue in civil court (damages, injunctions, recovery of company property), and/or (3) pursue criminal complaints (e.g., qualified theft, estafa, disclosure of industrial secrets, data offenses). This article explains the legal bases, venues, procedures, timelines, defenses, and practical steps for both sides.

What counts as “conflict of interest” in the PH workplace?

A COI typically exists when an employee’s personal, financial, or relational interests materially interfere with their duty of loyalty to the employer. Common patterns:

Undisclosed outside employment or business competing with the employer.
Self-dealing (awarding contracts to one’s own company or a relative’s).
Kickbacks or gifts that affect business judgment.
Misuse of confidential information (pricing, client lists, R&D, strategy).

COI standards usually live in: (a) the Labor Code (as “fraud” or “breach of trust” just causes for dismissal), (b) the Civil Code duty of good faith, and (c) company policies (codes of conduct, conflict-of-interest and confidentiality clauses, non-compete / non-solicitation).

Resignation: what it does—and doesn’t—do

It ends the employment relationship (once accepted or effective under contract or policy), but does not immunize the employee from past acts.
The employer may continue the fact-finding and complete an administrative decision for record purposes (e.g., “dismissal for cause effective immediately prior to separation” or “acceptance of resignation with reservation of rights”).
Clearance and final pay processing may be held or offset only according to law and policy (e.g., for accountable property or documented cash advances). Employers must avoid unlawful withholding; instead, they should document set-offs or file a claim.
Waivers or quitclaims signed at resignation are valid only if voluntary, for a reasonable consideration, and not against law or public policy; they do not bar claims arising from fraud, coercion, or concealed facts.

Can the employer still “file a case” after you resign? Yes—three tracks

1) Administrative / employment track

Purpose: establish just cause (e.g., serious misconduct, fraud, willful breach of trust), document liability, and protect records.

Due process (“twin-notice” rule):
1. Notice to Explain (NTE) detailing facts and policy breached; reasonable time (commonly at least 5 calendar days) to respond.
2. Opportunity to be heard (conference or written defenses).
3. Decision notice with factual and legal basis.
Even if the employee has resigned, employers often issue findings for internal closure and future reference (e.g., rebutting claims of constructive dismissal, supporting civil/criminal complaints).
Venue: internal procedure; if a dispute arises (e.g., on wages/clearance), Labor Arbiter handles certain money claims; illegal dismissal cases are employee-initiated, not employer-initiated.

2) Civil track (regular courts)

Typical reliefs the employer may seek:

Damages for breach of duty/contract or quasi-delict (tort).
Injunctions (e.g., to stop ongoing misuse of trade secrets or client poaching).
Specific performance / replevin to recover devices, documents, prototypes, or files.
Unjust enrichment or accounting for profits gained through self-dealing. Key points:
Trade secrets & confidential info: enforceable via nondisclosure and confidentiality clauses, Civil Code obligations of good faith, and principles against unfair competition.
Non-compete / non-solicitation: generally enforceable if reasonable in time, geography, and scope; courts strike down restraints that are broader than necessary to protect legitimate business interests.
Prescription (typical):
- Written contract claims: 10 years.
- Quasi-delict (tort): 4 years.
- Unfair competition / IP-related civil claims: follow special statutes where applicable.

3) Criminal track (prosecutor’s office)

Potential offenses when COI involves property, deception, or secrecy:

Qualified theft (taking company property entrusted due to employment).
Estafa (swindling; deceit causing damage, e.g., kickbacks, falsified expense claims).
Revelation of industrial secrets (employee divulges an employer’s secret to the employer’s prejudice).
Computer-related offenses (e.g., unauthorized access or data interference under special laws).
Intellectual property violations or unfair competition (if misappropriating trade dress or trade secrets in certain contexts). Notes:
Criminal cases require proof beyond reasonable doubt; parallel civil actions for damages may be filed or reserved.
Prescription varies by offense (check the Revised Penal Code or special laws).
Employers usually start with a sworn complaint before the City/Provincial Prosecutor (inquest if caught immediately; otherwise, regular preliminary investigation).

Evidence employers (and employees) should care about

For employers

Documented policies: COI, confidentiality, acceptance of policies, job descriptions, authority limits.
Digital forensics: email headers, access logs, device audit trails, DLP alerts, version histories, file transfer records.
Transactional records: contracts, supplier bidding papers, purchase orders, receipts, reimbursements, approvals, bank proof of payments.
Link analysis: corporate registries, beneficial ownership, family ties (to show self-dealing).
Chain of custody and data-privacy-compliant collection to preserve admissibility.

For employees

Employment contracts, policy manuals, and any disclosures made (e.g., approved sidelines).
Correspondence showing consent or lack of materiality of the outside interest.
Records of performance and absence of damage.
Due process defects (rushed NTEs, predetermined decisions).
Whistleblowing angles (if the “COI” accusation retaliates against protected disclosures).

Due process pitfalls & best practices (administrative)

Employer checklist

Issue a specific NTE (who/what/when/where/how; cite policy clauses).
Grant ≥5 calendar days to respond; allow access to evidence relied upon.
Hold a hearing or conference if requested or required by policy.
Weigh evidence; issue a reasoned decision (facts, rules, proportional penalty).
If resignation already tendered, state “acceptance without prejudice to claims and to the outcome of investigations”; avoid blanket releases unless intended and lawful.
Avoid indefinite withholding of final pay; instead, document set-off or file claims.

Employee checklist

Respond in writing; address each allegation; attach exhibits.
If there was approval of outside work or de minimis activity, show it.
Raise procedural defects and request time or records if needed.
Return company property/data; request inventory & acknowledgment.
Avoid deleting or tampering with data—this can worsen exposure.

Non-compete, non-solicitation, and NDAs after resignation

Non-compete: enforceable if narrowly tailored (e.g., 6–24 months; limited territory; tied to the employee’s role/clients/tech). Overbroad bans on working “in any competing industry anywhere” are at risk.
Non-solicitation: generally easier to enforce (targeting specific clients or employees for a reasonable period).
NDAs/confidentiality: typically survive resignation; liability can be civil and—even for “industrial secrets”—criminal.
Remedies: injunctions, liquidated damages (if reasonable), actual/temperate/moral damages depending on proof.

Where to file: a quick map

Objective	Typical Venue	Key Output
Internal findings (policy breach)	Employer’s administrative process	Decision memo (for records)
Recover property / damages / enforce covenants	Regional Trial Court (civil)	Injunction, damages, replevin, accounting
Criminal accountability	Office of the City/Provincial Prosecutor → Trial Court	Information filed, conviction/acquittal
Labor money claims (e.g., wage differentials, last pay issues)	Labor Arbiter (NLRC)	Monetary award/denial
Licensed professionals’ ethics issues	PRC or relevant regulator	Administrative sanctions

Timelines & prescription (orientation guide)

Labor money claims: generally 3 years from accrual.
Written contract (civil): 10 years; quasi-delict: 4 years.
Criminal: depends on the offense (check governing statute).
Injunctions: apply promptly; delay undermines urgency.
Evidence retention: employers should have retention schedules; employees should keep copies of submissions and receipts.

Frequently asked questions

1) If I resign before the investigation ends, am I safe from firing “for cause”? Not necessarily. Employers may finalize findings, and the record may show dismissal for cause effective before separation (or acceptance with reservations). This can support civil/criminal actions.

2) Can my employer withhold my final pay because of an allegation? They may offset documented accountabilities (e.g., unreturned equipment, admitted cash advances) but should not indefinitely withhold pay purely on allegations. Disputes go to the Labor Arbiter.

3) Is having a side business automatically a conflict of interest? No. It depends on disclosure, policy, competition/materiality, and impact on duty. Approved sidelines, or non-competing ventures done off-hours without misuse of company resources, are less likely to be COI.

4) Can I be sued for using knowledge and skills I learned on the job? Generally, skills and general know-how are portable. What’s restricted is the use or disclosure of confidential information/trade secrets, client lists compiled in confidence, and code or documents owned by the employer.

5) What if the non-compete is too broad? You may challenge it as an unreasonable restraint of trade. Courts often blue-pencil or strike down overbroad covenants.

6) Can the employer file both criminal and civil cases? Yes. They may pursue a criminal complaint and a civil action for damages simultaneously or reserve the civil action.

Practical playbooks

For employers

Freeze & preserve: suspend auto-deletes, secure devices/accounts, image drives, pull logs.
Scope facts: who knew what, when; quantify damage; map counterparties.
Follow due process even post-resignation; avoid shortcuts.
Choose the forum: civil injunction if leakage is ongoing; criminal if theft/fraud; PRC/regulator where relevant.
Settle where sensible: return of data/devices, undertakings, tailored non-solicit, liquidated damages.

For employees

Stop the bleeding: return assets, cease using any company material, document turnover.
Hire counsel early; don’t sign broad quitclaims without advice.
Build your file: approvals, disclosures, absence of damage, performance records.
Negotiate: neutral reference language, time-bounded covenants, clear settlement terms.
Mind your devices: personal accounts mingled with work data complicate things—cooperate on segregating content.

Bottom line

Resigning does not bar your (former) employer from filing administrative, civil, or criminal cases tied to conflict-of-interest conduct. Outcomes turn on policy clarity, evidence quality, due process, and the reasonableness of any post-employment restraints. Whether you are the employer or the resigning employee, act quickly, document meticulously, and seek counsel to tailor strategy to the facts.

This article provides general information on Philippine law and workplace practice and is not legal advice. For specific cases, consult a Philippine lawyer.