Stanford GSB Wins Key Legal Battle Against Professor

Former Stanford Graduate School of Business Dean Garth Saloner


The school argued that because Phills’ wife left the home and was separated from her husband, the school could then force Phills to immediately pay back the loan with interest and a portion of the appreciation on the house. Phills also claimed in his lawsuit that Saloner removed him as director of executive education programs he had developed and taught for years on top of his MBA-program duties, replacing him with less-qualified faculty. The school also, according to Phills, had others teach the programs he had created, even though the programs used used teaching materials and a textbook that he had authored.

While the sex scandal dominated headlines, arguably the most damaging revelations centered on a rebellion against the dean led largely by women who had been in senior leadership positions at the school. The group of 27 current and 19 former GSB employees known as the “Group of 46” had petitioned the provost to deny Saloner a second term, a request he ultimately turned down. They sent their letter of protest on April 21, 2014, shortly after Phills was fired. But his dismissal was unrelated to their assertions that Saloner was an atrocious leader of the school. The Group of 46 letter sent to the provost arrived in a package containing 13 testimonials, plus other statements, from former staff describing their experiences under Saloner’s leadership. Those testimonials suggested a pervasive pattern of dysfunctional management in which rules and protocols were routinely trampled.

Ultimately, six members of the group–all women–went to see university Provost John Etchemendy in May of that year. They were a formidable group, with combined leadership experience of 60 years in high positions at the GSB. One had headed the MBA program for almost 11 years. Another had run the school’s Center for Social Innovation for a decade. A third had spent nearly a dozen years in charge of the GSB Center for Entrepreneurial Studies. A fourth was the founding executive director of the GSB Center for Leadership Development and Research. Five of the six delegates had degrees from the university, and four of them had an MBA or PhD from the Graduate School of Business.


Among the delegates was Sharon Hoffman, who had spent nearly 11 years as MBA program director, after nine years reading more than 10,000 MBA applications as senior associate director of MBA admissions. She alleged that Saloner manipulated her out of her job and out of the school in early 2014. Etchemendy’s declaration that the decision on Saloner’s deanship had been made and there was nothing else to do sounded to her like “a strong vote of no confidence” in the grievances the group was bringing forward. “He also pushed back on everything we said . . . in a somewhat patronizing if not infantilizing way,” Hoffman remembered. “He counter-argued. It was very clear at the end of the meeting that he was going to stand behind Garth one hundred per cent.”

According to Hoffman, in February of 2014, Saloner called her into his office and told her he was moving her from the MBA program, where she oversaw 800 students and 70 staff, to the in-transition one-year Sloan master of management program, overseeing about 70 students and three staff. The new job would also require two to three months of travel per year, in six- to eight-week blocks. She had three children at home, and considered the travel obligation impossible to fulfill. The HR department told her if she didn’t take the new position, she’d no longer have a job at the GSB. She refused the position.

To announce her departure, the dean’s office sent out a message indicating that she was leaving to spend more time with her family, a claim Hoffman dismisses as “complete and utter baloney.” She asked that Saloner’s office correct the statement, but Saloner refused, she says. So she sent out her own notice to students and staff, telling them she was leaving because the dean wanted new leadership in the MBA program. “I figured he could send out the email he wanted but I was damn well going to send out my own,” she says. “I wanted everyone to know, given the miserable way in which it happened, that I was being pushed out.”


Humiliated by her treatment, she left the school. “You can’t overemphasize how mortifying this was. There was a lot of crying. It was just an absolutely miserable way to leave what was a spectacular career with amazing students in an altogether fantastic institution that I still really love.”

For both the school and the university the provost’s decision to extend Saloner’s deanship to a second term turned out to be critical, laying the groundwork for months of negative publicity about the school, the university and its leadership. The scandal added to widespread accusations of sexual harassment and unfair treatment of women in Silicon Valley. It also led to the appointment of Jonathan Levin, a highly respected scholar in economics at Stanford, as Saloner’s successor and the decision of a former senior associate dean, Madhav V. Rajan, to leave the GSB for the dean’s job at the University of Chicago’s Booth School of Business.

Only two weeks ago, Levin added a second woman to the GSB’s four-member senior leadership team,  the first time in the school’s history that two women will have held the title of senior associate dean.


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