While unfair, it is perfectly legal.  That is unless this is a violation of existing company policy or you have an employment contract or union agreement that provides otherwise.  Also, discrimination must not play a role here (although it does not appear to based on the facts presented; nepotism is not illegal).  In the majority of employment arrangements, employment is "at will".  This means that an employer can hire or fire an employee for any reason or no reason whatsoever, as well has increase/decrease salary/hours, promote/demote, and generally impose requirements as it sees fit.  In turn an employee can choose whether or not to work, or continue to work, for an employer.