NEW YORK — William Agee was 38 and a rising corporate star in 1976 when the Bendix Corp., a large auto-parts maker, made him one of the youngest chief executives of a major US company.
Handsome and articulate, with an MBA from Harvard, Mr. Agee personified a new, more fast-moving, less bureaucratic management style that was starting to take hold. He got rid of Bendix’s boardroom table as a stodgy artifact of the past, banned executive parking spaces, and often dressed in a style now known as business casual.
Three years after he took the reins at Bendix, Time magazine featured him in a cover article with the headline “Faces of the Future.” He was personally appealing, and so was his message: Success at his company should be based on merit rather than seniority or tradition. He acted on that notion by recruiting and promoting young managers.
As it turned out, it was a recruiting decision — the hiring in spring 1979 of a bright, promising female employee named Mary Cunningham — and Mr. Agee’s subsequent handling of their relationship that largely defined his business career, touching off a national discussion about workplace behavior that reverberates today.
Mr. Agee died on Wednesday at the Swedish Hospital in Seattle. He was 79. His daughter Suzanne Agee said the cause was respiratory failure as a complication of scleroderma, a degenerative disease in which the immune system harms healthy tissue.
Mr. Agee originally hired Cunningham, who also had a Harvard MBA, as his executive assistant. She quickly moved up the ranks at Bendix, becoming vice president for strategic planning within 15 months.
Soon after that, however, she was forced to leave the company under pressure amid allegations that she and Mr. Agee were having an affair — something they both denied. They later divorced their spouses, and they married in 1982.
Cunningham’s abrupt departure from Bendix provided fodder for months of newspaper and magazine articles and commentary. Author Gail Sheehy wrote a syndicated newspaper series titled “The Saga of Mary Cunningham.”
In her book “Powerplay: What Really Happened at Bendix,” written with Fran Schumer and published in 1984, Cunningham denied that she and Mr. Agee had a sexual relationship while they were co-workers. But she admitted to being “very naive,” and said she had miscalculated the strength of gender stereotypes inside the company.
“It was my very competence that threatened them,” she wrote.
Although the episode differed in key respects from the current wave of sex-related office scandals — the question then centered on romance-fueled favoritism, not harassment or assault — it helped lay the foundation for the current debate over gender and behavior in the workplace, especially the dynamics involved when one of the people in a relationship is the boss.
Peter Cappelli, director of the Center for Human Resources at the Wharton School of the University of Pennsylvania, said the drama that swirled around Mr. Agee and Cunningham at Bendix had “a big effect, especially on boards” at large public companies. In recent years, Cappelli noted, boards have pushed out senior executives at corporations including Best Buy, Boeing and Hewlett-Packard for inappropriate behavior, typically affairs with subordinates.
William McReynolds Agee was born on Jan. 5, 1938, in Boise, Idaho. (He later changed his middle name to Joseph.) His father, Harold J. Agee, held various jobs, including manager at a manufacturing company, dairy farmer and state legislator. His mother was the former Suzanne McReynolds.
Mr. Agee paid his own way at the University of Idaho while working in a supermarket’s accounting department. After graduating from Harvard Business School, he joined the paper company Boise Cascade, earning a series of promotions and becoming chief financial officer at 31.
He joined Bendix, which was based in a Detroit suburb, in 1972 and thrived immediately. He was named chief executive when W. Michael Blumenthal, his predecessor, left the company to become Treasury secretary under President Jimmy Carter.
Bendix performed well under Mr. Agee at first, although his relationship with Cunningham raised questions about his judgment. His strength was mainly in finance. Increasing the value of a company’s shares, he wrote in an op-ed essay in The New York Times, is “the foremost objective of responsible management.”
To that end, he pursued asset sales, investments and mergers. But even as a deal-maker, he was occasionally dogged by the public perception of his ties to Cunningham.
When Bendix purchased a 5 percent stake in RCA in 1982, RCA rebuffed the move. “Mr. Agee,” RCA said, “has not demonstrated the ability to manage his own affairs, let alone someone else’s.”
Ultimately, an ill-conceived takeover attempt that year led to Mr. Agee’s departure from Bendix.
Seeking new markets, he bid for the rocket-maker Martin Marietta. In what The Times described as “one of the most bizarre takeover battles in American corporate history,” Martin Marietta responded by trying to take over Bendix.
The fight ended with Bendix being bought by Allied Corp., now Allied Signal. Mr. Agee left the merged company in 1983.
In addition to Cunningham Agee and his daughter Suzanne, from his first marriage, to Diane Weaver, Mr. Agee is survived by two other children from that marriage, Kathryn Gillis and Robert William Agee; two children from his second marriage, Mary Alana Kurz and William Nolan Agee; two sisters, Carolyn Hjort and Jacqueline Agee; and eight grandchildren.