Between 2018 and 2020, California passed two so-called “corporate diversity” bills intended to put more women and minorities on the boards of directors for corporations having headquarters in the state. AB 826 required corporations to have an increasing number of women on their boards, up to as many as three if the board had six or more members. Then came AB 979, which mandated that boards have at least one member of an “underrepresented community” by the end of 2021. Companies found to not be in compliance would be fined hundreds of thousands of dollars.
The latter bill ran into a major setback on Friday when Judge Terry Green of the Los Angeles County Superior Court ruled that Ab 979 was unconstitutional, violating the state constitution’s equal protection clause. The suit had been brought by Judicial Watch, which hailed the ruling as a significant victory over “one of the most blatant and significant attacks in the modern era on constitutional prohibitions against discrimination.” (Reuters)
A Los Angeles court has found a California law mandating that publicly traded companies include people from underrepresented communities on their boards unconstitutional, ruling in favor of a conservative group seeking an injunction against the measure.
Los Angeles County Superior Court granted summary judgment to Judicial Watch on Friday. The conservative legal group had argued the law violates the equal protection clause of California’s constitution. The ruling did not provide Judge Terry Green’s reasoning behind the decision.
The law, passed in 2020, required that publicly traded companies with a main office in California appoint at least one member of the Asian, Black, Latino, LGBT, Native American, or Pacific Islander communities to their boards by the end of 2021 through either filling a vacant seat or creating a new one.
Both of the laws in question are facing multiple lawsuits in the state, but this is the first case where one of the bills was placed on hold. Each was passed in California in response to the flurry of George Floyd and BLM protests and riots. And both have produced plenty of controversy.
AB 979 requires that at least one member of any company’s board be “Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or… lesbian, bisexual, or transgender.” This should once again immediately raise the question of precisely how Black, Hispanic, or whatever the candidate is. Would someone with one Black parent and one white parent qualify? Would Elizabeth Warren make the cut? The bill gets around that troubling question by simply saying that the member needs to “self-identify” as belonging to one of those categories.
So I’m guessing that all it would take would be for the full board to sign up for one of those genealogy testing websites and get a result with some amount of minority DNA in their background, right? Even if a seemingly white person had a documented hit of Subsaharan African DNA, they could “identify” as Black and meet the requirement. (Heck, even I could qualify for the board under that rule.) The same thing would go for the gender requirement since we’re living in 2022. One of the men could simply declare themself to be a trans woman and the board would fill not only the required female slot but the LGBTQ+ requirement as well.
And while we’re on the subject, particularly since we’re talking about California, where do they get off saying that corporations have to have “a woman” on the board anyway? I have been reliably informed that there are no such things as women anymore because nobody can actually define what a woman is. Heck, we’ve got someone who is about to be appointed to the Supreme Court who has no idea what women are. Just saying…
I’m still not entirely clear what the plaintiffs meant with their claim that the law violated a prohibition against discrimination. Discrimination against who? White people? Men? (More likely white men I would imagine.) Efforts along those lines generally haven’t fared well in the courts.
If these bills were to be challenged, I would have thought the challenge should be rooted in the concept of governmental overreach. The government can set these sorts of mandatory minimums in terms of race and gender to its own governmental agencies in some cases and those types of rules have held up in the past. But these laws apply to private-sector corporations. The final judge of such questions should be the free market. Consumers are free to look up the board membership of any company and if they are offended by the gender or racial makeup of the members they are free to vote with their feet by taking their business elsewhere.
Also, while a company can certainly get itself in trouble if it can be proven that they’ve engaged in racist hiring practices, these bills don’t even raise the question of racism or sexism. They simply declare that if women or certain minorities aren’t represented on the board, they have to either replace an existing member or add another seat, even if the current members were deemed the most qualified people for the positions.
Of all of the problems with these bills, I would argue that an implied requirement for discrimination against white men would be among the weakest arguments to make. But I suppose you take your victories where you find them.