City of Dreams operator ordered to honor Bloomberry compromise deal

THE COURT OF APPEALS (CA) ordered City of Dreams operator MCE Leisure ( Philippines) Corporation to abide by its compromise agreement with Solaire owner Bloomberry Resorts and Hotels, Inc. ( BRHI), wherein the company agreed not to hire the latter’s staff within six months to one year from resignation.

In a 13-page decision dated Feb. 28, the CA’s Fifteenth Division said MCE Leisure is ordered to comply with provisions of its compromise deal with Bloomberry dated Nov. 28, 2014.

Under the agreement, MCE Leisure cannot hire or employ any person formerly or currently hired by BRHI for a period of six months from date of resignation from the latter. If the person has a non- compete clause longer than six months, MCE Leisure is also bound to respect this provision.

Bloomberry had filed a case against MCE Leisure, alleging the City of Dreams operator violated the compromise agreement when the Crown Group of Companies/Crown Resorts Ltd. hired Solaire employee Miles Fong Hio Lon.

Bloomberry noted Crown Group, which is considered one of Australia’s largest gaming and entertainment groups, has a significant stake in Melco Crown Entertainment Limited. Melco Crown in turn has a 68.8% stake in MCE Leisure’s parent Melco Crown ( Philippines) Resorts Corp.

Mr. Fong was employed by Solaire as director for premium and player development on Sept. 1, 2013, tasked to work with junket operators. His contract included a 120- day notice period in the event he decides to resign, as well as a non-compete clause that prevents him from joining a company that owns or has an interest in a casino/ hotel in the Philippines for one year.

Mr. Fong resigned from Solaire in January 2015, and asked the notice period to be waived. His request was subsequently denied, and the company reiterated his contract will expire on May 9, 2015.

On Feb. 8, 2015, Mr. Fong stopped reporting to work at Solaire and began working for Crown Resort Limited as director for sales operations.

In its case, Bloomberry noted Crown Resort is a parent company of MCE Leisure and is thus covered by the compromise agreement.

However, MCE Leisure said the compromise agreement does not cover persons employed outside of the Philippines, adding “it was impossible to prevent Crown Resorts Limited from hiring [ Mr.] Fong.”

In weighing on the merits of the case, the CA said: “No qualifying (statements) were placed in the agreement to describe the ‘ parent companies’ of respondent MCE Leisure Corporation. As we see it, the interpretation being advanced by respondents seek to unduly restrict the scope of the compromise agreement, which it has entered into with petitioner.”

“Respondent MCE Leisure Corporation specifically undertook to bind itself, together with its parent companies and subsidiaries to comply with the provisions of the compromise agreement,” the CA added.

The CA then ruled MCE is obliged to inform its parent company as well as subsidiaries of the provisions of the said compromise agreements. The appellate court that it was not stated in the compromise agreement that the employment restriction only applies to companies within the Philippines.

The decision was penned by Associate Justice Jhosep Y. Lopez. Concurring were Associate Justices Ramon R. Garcia and Leoncia R. Dimagiba.