Judge rules California diversity law for corporate boards unconstitutional

April 5, 2022

By JOSH FRIEDMAN

A Los Angeles judge ruled on Friday that a California law requiring corporations to include members of underrepresented groups on their boards of directors is unconstitutional. [LA Times]

The 2020 law requires boards of publicly traded companies with a main executive office in California to include a member of an “underrepresented community,” which could be LGBT, Black, Latino, Asian, Native American or Pacific Islander. Corporations that were not complying had until California the end of 2021 to do so, either by adding a seat or filling a vacant one.

Additionally, corporate boards with a makeup of four to nine directors needed to include at least two underrepresented community member directors by the end of 2022. For even larger boards, the law requires three such directors.

Companies that do not comply could face fines of $100,000 for first violations and $300,000 for repeat violations. Thus far, no businesses have been fined, and no tax dollars have been used to enforce the rules, according to the state of California.

Judicial Watch, a conservative legal group, sought a permanent injunction against the law, arguing it violates California’s equal-protection clause.

On Friday, the Los Angeles judge granted summary judgment to Judicial Watch. The judge’s brief ruling did not explain why.

The ruling declared unconstitutional “one of the most blatant and significant attacks in the modern era on constitutional prohibitions against discrimination,” Judicial Watch President Tom Fitton said in a statement.

State officials have argued the law does not discriminate against or grant preferential treatment to any individual or group on the basis of race, sex, color, ethnicity or national origin.


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MrYan

Prediction; as a result the State will direct PERS to only invest in companies that have diversified boards.

Bypassing court review and effectively using its purchasing power to exact the change that this legislation attempted to do.


retiredpoliceofficer

To not to run afoul of the law it would be prudent for California residents to assume that everything they do is illegal. Better safe than sorry,


The problem is that the CA Legislature meets 12 months a year. To justify their existence, salaries and pensions they have to find things to keep busy. So, they make as many stupid laws (most revenue raising related) as they can.


If the legislature only meet 3 months a year like they do in some states this abuse would be stoped and residents would stop fleeing the state.


The governor boasts a multi- billion dollar budget surplus. That’s not a surplus it’s money they stole from us and won’t give back.


aye-caramba

The concepts of justice, equity and diversity have always been staked out and claimed by the “left”. This is not new. BUT why do they think that thrusting laws and forcing this idea actually does anything but create animosity, corruption and resentment? It just goes against the concept. Have they lost their minds?


derasmus

Short answer aye-caramba, YES!


shelworth

Sad that a Judge had to point this out to the legislature…


kayaknut

“and no tax dollars have been used to enforce the rules”, but how many tax dollars wasted on getting this proposed law to the point a judge rules it unconstitutional?


unusualsuspect

Good. A totally ridiculous and unjust “law”.