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Stanford GSB Wins Key Legal Battle Against Professor

Stanford GSB Dean Garth Saloner on campus in August 2015 – Ethan Baron photo

After a more than three-year legal battle, Stanford’s Graduate School of Business won an important victory against a professor who claimed that he was harrassed and discriminated against by the school’s dean.

The case drew headlines around the world and raised serious questions about Dean Garth Saloner’s judgment, leadership ability, and ethics. It ultimately led to Saloner’s resignation a little more than a year into his second term and severe damage to the reputation of the business school and the university. Among other things, the lawsuit by Professor James A. Phills accused Dean Saloner of railroading him out of the business school while sleeping with his wife, also a Stanford GSB professor. Evidence in the case showed that Saloner had directly approved a personal decision that was harmful to Phills while the dean was having the affair.

The litigation also brought to light a previously unknown revolt by 46 current and former staffers to prevent Saloner from gaining a secord term as dean. The staffers alleged that the dean had created a “hostile workplace” in which staff, particularly women and people over 40 were hounded out of jobs and roles amind numerous violations of the university’s Code of Conduct and human resource policies. The leaders of the revolt, who ultimately met with the university provost, portrayed Saloner as an arrogant narcissist who used staff as pawns in power plays, meted out punishments against anyone who disagreed with him, and manipulated women out of influential positions so he could surround himself with “yes men” (see Anatomy Of A Rebellion: Inside The Revolt Against Stanford GSB Dean Garth Saloner).


Former Stanford GSB professor Jim Phills

But on the narrow issues raised by the Phills lawsuit, Saloner and the university prevailed. Superior Court Judge Theodore C. Zayner on Tuesday (August 1) granted the requests of Stanford and Saloner for summary judgment. The judge said that Phills had “failed to show that he was subject to discrimination, was wrongfully terminated or was subject to harassment.”

Phills’ lawyers said their client is considering an appeal of the judgment. “We will be exploring all avenues of review at the trial and appellate levels,” said Andrew F. Pierce, Phills lawyer, to The New York Times. “The case raises novel issues about the definition of marital status discrimination and in particular whether it applies to marital separations of co-workers. It also rasies novel issues regarding a university’s responsibility to protect faculty from administrators who have reason to  recuse themselves.”

In a statement from the university, a spokesperson said the judge’s decision was evidence that the case never had any merit. “Stanford has always maintained that the claims brought by James Phills in 2014 were meritless,” said Lisa Lapin, a spokesperson for the university. “We are pleased that the court has acknowledged this by dismissing all of Phills claims against Stanford and Dean Saloner. Stanford is entitled to recover costs against Phills as well as sanctions that were previously awarded for his improper behavior with respect to discovery in this case. In addition, the court has allowed Stanford’s cross-complaint against Phills to go forward. It is unfortunate that the system allows plantiffs to file and publicize sensational and baseless claims, causing long-term harm that cannot be undone years later, even with a complete victory as this one.”


Stanford GSB professor Deborah Gruenfeld

Phills, now employed by Apple, did not answer emails seeking his comment on the judge’s opinion. Saloner, who has been on sabbatical this past year since leaving his job at the end of the 2016 school year, released a statement through a spokesperson. “I am gratified that the truth in this matter has been recognized by the court,” it said.

The professor had filed his lawsuit in April of 2014, alleging that Saloner’s romantic relationship with his wife led to “discriminatory actions with respect to his compensation, work assignments and benefits baed on his marital status, race, and gender.” Phills is an African-American while his now ex-wife, Deborah Gruenfeld, is white (see The ‘Rock Star’ Prof At The Center Of The Stanford GSB Storm). Saloner, originally from South Africa, had begun the affair with Gruenfeld not long after his wife died of cancer.

Within the eight volumes of Santa Clara County Superior Court files in San Jose, which form a stack more than a foot high, and within the three volumes in Sunnyvale Superior Court, details of the dean’s affair include the revelation that Saloner used the alias “Jeni Gee” while telling Gruenfeld on Facebook that he hoped Phills, Gruenfeld’s professor husband, would leave the school. 


At some point, and via a mode of communication not made clear in court documents, Saloner and Gruenfeld had an exchange that Phills’s lawyers call “probative of whether he bore ill will towards Phills.”

In the correspondence, Gruenfeld writes, “He deserves a starring role, but you need to rewrite: (sic) the ending.” Saloner responds, “Knife. Penis. Town square. Got it.”

Phills was fired April 3, 2014 from his full-time job teaching in the GSB MBA program, with the termination effective June 3 of 2015. Phills’ lawsuit was filed a day before he was fired, but court filings indicate the termination had been in process before the lawsuit was filed, suggesting coincidental timing. 

Saloner’s relationship with Phills’ wife was first acknowledged 18 months before the professor filed his lawsuit. The dean first informed the university of his growing relationship with Phills wife on October 31, 2012. It was after that notification to the provost that Saloner decided to call in a $250,000 loan given to Phills and his wife to help them with the purchase of their home when they first came to the school as a married couple in 2000.

About The Author

John A. Byrne is the founder and editor-in-chief of C-Change Media, publishers of Poets&Quants and four other higher education websites. He has authored or co-authored more than ten books, including two New York Times bestsellers. John is the former executive editor of Businessweek, editor-in-chief of Businessweek. com, editor-in-chief of Fast Company, and the creator of the first regularly published rankings of business schools. As the co-founder of CentreCourt MBA Festivals, he hopes to meet you at the next MBA event in-person or online.