That depends on what the meaning of "is" is. Erm, I mean...

You can do -e '../foo/bar', which checks a file in a different directory, but I don't consider a relative path to be "a FULL file path" either. That's just semantics, I know, but it seemed like something worth clarifying in case the OP reads your comment the way I did.

To the OP: It works like filename arguments (which ignore $PATH), not executable filenames (which search $PATH). ls foo only looks in the current directory, ls /bin/foo only looks in /bin, and ls ../bar/foo only looks in ../bar. -e works the same way.