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It is being reported in numerous publications that Restoration Hardware Holdings has ousted Gary Friedman, the company's co-CEO, after the board learned that Friedman, 54, was having a romantic relationship with a 26-year-old female employee. The female in question reportedly had left the company before the relationship became public knowledge, and the romance is said to be both consensual and continuing.

Restoration Hardware is currently preparing for an IPO, and the board is said to be concerned that the romance could become a distraction and hurts its share price. The relationship came to light when it was brought to the board's attention by the woman's ex-boyfriend.

The Los Angeles Times writes that "the report came months after electronics giant Best Buy's then-chief executive, Brian Dunn, stepped down in April under similar circumstances. An investigation by the board discovered he had shown 'extremely poor judgment' with a 29-year-old female employee; the scandal later forced company founder Richard Schulze to resign as chairman.

"Former Hewlett-Packard Chief Executive Mike Hurd resigned in 2010 after accusations of sexual harassment and falsifying expense reports to hide a 'close, personal relationship' with an independent contractor."
KC's View:
Okay, I'm going to walk out on what could be thin ice here, and I'm probably going to get myself in trouble. But here goes...

I'm not entirely sure that the Restoration Hardware board did the right thing here. As far as we know, the woman in question is single. Friedman reportedly has been divorced for years. The relationship is consensual. There have been no charges of sexual harassment, no allegations that Friedman did anything improper, immoral or illegal. Nobody was married, nobody was cheating.

Certainly, if a senior executive is dating someone who works for his or her company, that executive has to be careful not to be involved in decisions about that person's compensation, and cannot have that person as a direct report. And I get that such relationships can have implications through an organization; in a previous life, I used to have a woman who was married to the company CEO reporting to me, and it certainly affected how one talked and acted in her presence. Not that she ever would have reported back to her husband, but it was better to be careful and not to put her in an awkward position. It would have been better, truth be told, if she had worked somewhere else.

But I'm just not sure this rises to the level of being a firing offense.

Nobody should shed any tears for Gary Friedman. He remains as a consultant to the Restoration Hardware board, he is said to be getting ample funding from the company for his next venture, and as a major shareholder in the company, Friedman will no doubt do very well when the IPO takes place.

But should he have been fired from the CEO job? Or was this just political correctness gone a bridge too far?