Stanford Business School dean Garth Saloner resigns amid affair scandal

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Garth Saloner steps down after six successful years as dean of Stanford
He is accused of sleeping with professor Deborah Gruenfeld, 54, while she was still married to fellow teacher James Phills, 55, before Phills was fired
Phills claims pair exchanged racy messages and treated him 'maliciously'
Saloner rejects the claims, insists relationship started after they divorced
Stanford supports Saloner. The school released a statement saying Phills, who is now a professor at Apple University, was rightfully fired

Published: 22:05 EST, 15 September 2015 | Updated: 00:00 EST, 16 September 2015

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The dean of Stanford Business School has resigned amid a scandalous court battle in which he is accused of having an affair with a fellow professor's wife.

Garth Saloner, who has directed the country’s leading business program for six years, announced on Monday that he will step down at the end of the academic year as the scandalous lawsuit has become ‘a distraction’.

The widowed economist and academic is accused of sleeping with Deborah Gruenfeld, 54, a Stanford professor and a board member of Sheryl Sandberg's LeanIn.org, before she had divorced fellow professor James Phills, 55, in December 2012.

According to Phills’ suit filed last year, he has reason to believe the pair exchanged 'extremely intimate' photographs and messages while he was still married.

The widowed economist and academic (left) is accused of sleeping with Deborah Gruenfeld (also left), a Stanford professor, before she had divorced fellow professor James Phills (right) in December 2012

He claims Saloner subsequently 'acted maliciously, fraudulently, despicably, and oppressively' and made unfair decisions about his employment.

In April 2014, Phills was fired; he now teaches at the Apple University.

Phills and Gruenfeld, who married in 1999, have two daughters aged 11 and 14, according to Baron, and both started working at Stanford in 2000.

Since Saloner stepped down on Monday, the dispute has erupted into a scandal at the school, which is known for producing the tech industry's bright stars, and numerous blogs and student newspapers have published details of the suit.

'Saloner used the alias “Jeni Gee” while telling Gruenfeld on Facebook that he hoped Phills, Gruenfeld’s professor husband, would leave the school,' writes Ethan Baron of Poets & Quants, a website that covers business schools.

Quoting the lawsuit, Baron continues: '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 and his attorneys have requested that all emails, Facebook messages and photographs between Gruenfeld and Saloner be turned over to the courts. Saloner has branded his request 'voyeuristic'.

Saloner rejects Phills' claims, insisting his relationship with Gruenfeld started in 2012 after she was divorced and that he informed the university from the beginning.

Saloner rejects Phills' claims, insisting his relationship with Gruenfeld started in 2012 after she was divorced and that he informed the university from the beginning. Stanford supports his case and regret his resignation

Nonetheless, on Monday, Saloner wrote to staff and students: ‘I have decided that it is in the best interests of Stanford and the (Graduate School of Business), two institutions that I love, that I step down.’

He said he and the university have spent months ‘vigorously defending a baseless and protracted lawsuit related to a contentious divorce between a current and former member of our faculty.’

Stanford has released a statement in support of Saloner, saying his resignation was received with ‘great regret’.

The –year-old has helped the program earn more than $500 million in private funding, and oversaw its rise to usurp Harvard as the top graduate business program in the country.

Stanford’s statement reads: ‘Dr Phills' teaching position at Stanford was terminated in 2015 when he failed to return to his university employment after the university had granted him multiple leaves of absence for lucrative opportunities in Silicon Valley, including leaves to work at Apple Inc., beyond what is normally allowed under university policy.’