okay, fair enough : it rarely ends well
these days, its simply 100% not allowed in many places
You can do it. You just have to be more careful about it (my wife and I met at work). There are plenty of stories out there of CEO's finding their spouses at work. If you go about it the right way, it can be just fine. Unfortunately, there are just as many (if not more) stories of it ending badly. The key differences between the two (and this is just my sense in my corporate world experience, i'm not an HR expert or anything, though my wife is very familiar with HR rules/processes and she generally agrees):
1. Disclosure to HR. If Mel's story is accurate (i'm not making a judgement of whether it is or isnt), then the first thing he should've done is gone to HR and told them that a consensual, romantic relationship was brewing between the two of them. Then HR would do their due diligence to make sure all is square. They'd also probably stop using her as a contractor given the obvious conflict of interest. In that case, if things go bad, you're already on the right foot with your employer. I, honestly, don't think they would've told him "no, you can't date her" as long as he came to them with the correct approach.
2. Avoid doing anything with a direct subordinate. If you want to take the risk and still do this, step (1) becomes really really important. In Mel's case, she can be considered a subordinate given Mel's has significant influence over whether she's used as a contractor at MSU. It's not a true subordinate relationship, but it's the next step up. In this case, the first thing they'd probably do is move that subordinate to another role where he/she is no longer reporting to you. Again, you need to do this RIGHT AWAY.
3. Make sure your personal affairs are in order. In Mel's case, make sure it's clear that you are separated from your wife and divorce proceedings are underway. It sounds like this was the case here, but, if you're a high profile employee, your employer will want some comfort that you're not cheating on your spouse and your spouse won't come back and point the finger at the employer.
All the above is applicable assuming the relationship is consensual. Obviously, if it's not consensual, then that's a whole different ballgame. That's why Tucker is an idiot for not taking the appropriate steps given, as he claims, the relationship was consensual.
To be fair, even if you do all those things, there's no guarantees it won't blow up in your face. But, as I and others have posted, that's the risk you take being a high profile employee. The mistake Mel made is doing all this with a MSU contractor and not taking the easy steps mentioned above, which all but guaranteed that he'd be in the situation he is now if there were any issues at all.