Unfortunately, yes, they can do this, unless you have a written employment contract protecting your employment and specifying your title, level, salary, etc. i.e. preventing demotion. That is because without a written employment contract, you are an "employee at will" and can be demoted or transferred, suspended, or even terminated at any time, for any reason whatsoever, including who your fiance is or whether you are involved with someone with a criminal record.