Stanford business school dean to step down amid lawsuit | News | Palo Alto Online |


Stanford business school dean to step down amid lawsuit

Garth Saloner is concerned that ongoing litigation will 'unfairly impact' the school

Garth Saloner, dean of the Stanford University Graduate School of Business, will be stepping down at the end of the current academic year in the wake of a lawsuit filed by a former faculty member whose wife Saloner had a romantic relationship with, according to the university.

Stanford announced Saloner's resignation in a statement Monday that described his concerns over a "baseless and protracted lawsuit" that James Phills, the former faculty member, filed against Saloner and the university in April 2014. Phills' lawsuit claims that he was the victim of discriminatory treatment at Stanford, according to the university, who, with Saloner, is challenging the lawsuit.

"At all times Dr. Phills was treated fairly and equitably," the university said in a statement.

Phills first came to Stanford in 2000 when his wife was appointed a tenured member of the Graduate School of Business Faculty. Three years later, he became a faculty member in a non-tenured position, according to the university. He and his wife separated in 2012 and have been engaged in ongoing divorce litigation since.

"Several months after the couple's separation, Dr. Phills' estranged wife and Dean Saloner, who was widowed, began a relationship," the university statement reads. "The dean informed Stanford leadership at the very beginning of the relationship, and others in the university took responsibility for final decision-making about matters involving Dr. Phills and his wife."

University policy requires notification and recusal in sexual or romantic relationships between adult employees, including faculty, when one has authority over the other, even if the relationship is consensual.

The policy notes that while consensual sexual or romantic relationships between adult employees are not in general prohibited, "relationships between employees in which one has direct or indirect authority over the other are always potentially problematic."

Stanford terminated Phills' employment this year when he failed to return after multiple leaves of absence the university had granted him for "lucrative opportunities in Silicon Valley," including a stint at Apple, the university said. These leaves went "beyond what is normally allowed under university policy," Stanford noted.

"Dr. Phills ultimately chose to continue his more lucrative employment at Apple," the university said.

Saloner, who has been dean of the world-renowned business school since 2009, announced his resignation in a letter to the Graduate School of Business community on Monday, the opening of the school's academic year.

"As many of you know, the university and I have been vigorously defending a baseless and protracted lawsuit related to a contentious divorce between a current and former member of our faculty," Saloner wrote. "I have become increasingly concerned that the ongoing litigation and growing media interest will distract all of you from the important work that you are doing and unfairly impact this stellar school's deserved reputation."

Saloner, who first arrived at the Graduate School of Business in 1990, said he plans to return to teaching and research as part of the school faculty, and made the announcement now to "allow time to plan for a smooth transition," the university statement reads.

Stanford's official press release on Saloner's resignation note the curricular, financial and physical advances he has overseen during his six years at the helm of the business school. He oversaw the adoption of a new Master in Business Administration curriculum, the opening of the state-of-the-art Knight Management Center and the launching of entrepreneurship and leadership programs in developing nations, according to the university. The school has raised more than $500 million in private funding since he became dean.

U.S. News & World Report named the Stanford Graduate School of Business the No. 1 school in the nation for 2016.

Saloner has also focused his efforts on diversifying the School of Business, the university said. Women comprise 41 percent of current MBA students and make up 54 percent of new faculty members hired in the past two years. Four of the five GSB volunteer boards are led by women and 30 percent or more of their members are women, according to the university.

The school faculty has increased by 17 percent since 2009 to 124 tenure-line faculty members. Lecturers and other teaching staff have almost doubled to 90 under Saloner's leadership, the university said.

Saloner is also one of only two faculty members to have won the Distinguished Teaching Award at the Stanford Graduate School of Business twice, first in 1993 and again in 2008, the university said.

"It is with great regret that I accept Garth's resignation, which I know was a difficult decision," Stanford President John L. Hennessy stated in the press release. "It has been a very successful tenure. Under his leadership, the business school has been a leader in transforming management education to address the world's economic challenges.

"He has expanded its international impact and he implemented an academic vision to train insightful, principled leaders who can drive global change. We are grateful to Garth for his service and his many contributions as dean, and look forward to his continued contributions to teaching and research at the GSB for many years to come."

Provost John Etchemendy will appoint a search committee to begin the process of finding Saloner's successor.

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9 people like this
Posted by GSB Alum
a resident of Old Palo Alto
on Sep 15, 2015 at 11:31 am

Profoundly sad. By all accounts an extraordinary leader, he found himself caught up in something he should have known would cause trouble - both for him and for the school. A lesson for all Stanford GSB grads - the rules and the realities of the workplace and the law apply to you as well. This is something he should not have touched with a 100 foot pole.

3 people like this
Posted by Alum
a resident of Crescent Park
on Sep 15, 2015 at 11:53 am

I don't know which of these three is more at fault, the dean for geetting involved with a subordinate, Gruenfeld for not giving her grieving boss some space, or Phills, who is taking the role of vindictive ex to new depths...with the encouragement of the media, only too eager to jump on the scandal bus.

[Portion removed.]

4 people like this
Posted by Daughters
a resident of Old Palo Alto
on Sep 15, 2015 at 1:15 pm

[Portion removed due to deletion of referenced comment.]

@GSBAlum: From the article, it seems to me that Saloner followed all the disclosure and other rules. I agree there could be some awkward situations but he seemed to be trying to be fully aboveboard.

4 people like this
Posted by Barron Park dad
a resident of Barron Park
on Sep 15, 2015 at 1:54 pm

Worth a read if you want more detail: Web Link

2 people like this
Posted by Me
a resident of Adobe-Meadow
on Sep 15, 2015 at 2:39 pm

Who cares who sleeps with who? Let's move on....

2 people like this
Posted by Hmmm
a resident of East Palo Alto
on Sep 15, 2015 at 4:28 pm

Hmmm is a registered user.

The bigger they are the harder they fall. So much to "lean in" to here, if you believe in that striving claw to the top.

Like this comment
Posted by bye bye now
a resident of Adobe-Meadow
on Sep 15, 2015 at 9:20 pm

[Post removed.]

3 people like this
Posted by Nora Charles
a resident of Stanford
on Sep 15, 2015 at 11:11 pm

There have always been office romances and always will be. He should not have to had stepped down.

9 people like this
Posted by not so
a resident of Palo Alto High School
on Sep 16, 2015 at 8:36 am

This is an educational setting, and this "office romance" is inappropriate and unethical. I would think the suit regarding the husband's dismissal may indeed have merit. Beyond that, this behavior is incorrect for "educational leaders" at a university if they wish to maintain a reputation for business education/leadership instead of acting like a soap opera. I would be more impressed if he "stepped down" prior to the suit being filed, that might reflect handling the awkward situation better, but this was a reactive step, likely under pressure from the institution, which is now worried about THEIR reputation.

5 people like this
Posted by Rocky
a resident of Old Palo Alto
on Oct 9, 2015 at 2:31 pm

All three are losers but the guy at the top is there for a reason, lead and set an example at the highest level because he is on top.

I am sure the support is there but this has to be embarrassing to everyone, less so for the husband who is cashing in on the situation and want revenge, may be for good reason but doubtful.

Gsb and Standord is hoping a miracle happens to save face but the dirt is out and they need to clean house and move on. He will retire or leave bc the school will ask him.

Not too impressed w gsb or hbs grads who think they are above bc they got in; which is the hardest part other than stay ground with good withies and away from greed and behavior like this. Hard to screen for looses but the top has to be squeaky clean which is not at the gsb right now.

Like this comment
Posted by Unbiasedperson
a resident of Evergreen Park
on Oct 9, 2015 at 2:42 pm

[Post removed due to same poster using multiple names]

2 people like this
Posted by Rocky
a resident of Old Palo Alto
on Oct 15, 2015 at 2:05 am

The integrity of the program doesn't exist, and integrity is your reputation. That's right your program has a bad reputation thanks to decisions made by the good old boys.

Like this comment
Posted by Gunn Alum Mom
a resident of Ventura
on Oct 20, 2015 at 8:21 pm

Garth Saloner bailed out a local child molester who is now serving a 67 year sentence: Web Link

Story about Tupou's victims: Web Link

2 people like this
Posted by GSB Alum
a resident of Adobe-Meadow
on Oct 20, 2015 at 9:45 pm

[Post removed due to same poster using multiple names]

1 person likes this
Posted by Why now?
a resident of Midtown
on Oct 21, 2015 at 8:51 am

I just read this article in the New York Times this morning. It is so sad that Saleno's career has buckled under a protracted and contentious divorce case. This kind of thing happens all the time in divorces, wish Stanford and the Dean could have stood up to unfair demands of spurned ex husband.

2 people like this
Posted by Oh the irony
a resident of Old Palo Alto
on Oct 21, 2015 at 10:28 pm

From today's NY Times article:

"Ms. Gruenfeld, 53, focused on how power leads people to do stupid things."

I have nothing to add here.

1 person likes this
Posted by Hmmm
a resident of East Palo Alto
on Oct 22, 2015 at 2:35 pm

Has anyone else read the Vanity Fair article depicting this tacky, tawdry, tasteless affair? Ewwww!

Like this comment
Posted by Slow Down
a resident of Community Center
on Oct 22, 2015 at 9:21 pm

Slow Down is a registered user.

@Hmmm - I think Gunn Alum Mom's post is a bigger indictment of Saloner than the Vanity Fair article.

Like this comment
Posted by Hmmm
a resident of East Palo Alto
on Oct 22, 2015 at 10:38 pm

Slow Down - that petition 20 years ago was ridiculous, but it's a little understandable that parents who'd never seen bad behavior from the molestor did think he was wrongly accused. Now that the guy is doing multiple decades in prison, hindsight is 20/20. But more importantly, did the petition make an impact? I don't think so. His affair - and what seem to be lies, if the husband is at all believable - took place before the divorce. If they weren't separated when the husband claims to have found the emails and the sexts - and took screenshots - then Saloner lied to his employer.

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