LOS ANGELES – A judge in Los Angeles ruled that the iconic California law, which requires women to be on corporate boards, is unconstitutional.
Supreme Court Justice Maureen Duffy-Lewis said the law, which requires up to three female directors to be on boards this year, violates the right to equal treatment. The ruling was dated Friday.
The Conservative Judicial Watch legal group has challenged the law, arguing that the illegal use of taxpayers’ funds to enforce a law that violates the Equal Protection of California Constitution by imposing a gender quota.
David Levin, a law professor at the University of California Hastings, said he was not surprised by the verdict. Under state and federal law, “holding such a quota will never work,” Levin said.
State Senate leader Tony Atkins, a Democrat from San Diego, said the decision was disappointing and a reminder, “that sometimes our laws don’t fit our reality.”
“More women on corporate boards means better solutions and businesses that outperform the competition,” Atkins said in a statement. “We believe this law remains important despite the disappointing decision.”
The decision came just over a month after another judge in Los Angeles ruled that a California law that diversifies its corporate councils involving members of certain racial, ethnic or LGBT groups is unconstitutional.
The Corporate Diversity Act was a continuation of a law requiring women to be on corporate boards. The judge in the previous case ruled in favor of Judicial Watch and the same plaintiffs without holding a trial.
The law, repealed on Friday, has been on shaky ground from the start, and legislative analysis said it could be difficult to defend. Then the governor. Jerry Brown signed it despite the possibility of its cancellation because he wanted to send a message to the #MeToo era.
For the three years that he has been in the books, he is credited with improving the situation of women in corporate boardrooms.
The state defended the law as constitutional, saying it needed to end a culture of discrimination that favored men and was introduced only after other measures failed. The state also said the law does not create quotas because councils can add seats for women directors without depriving men of their positions.
Although the law provided for potentially severe fines for failing to provide an annual report or failing to comply with the law, the head of the secretary of state’s office admitted during the trial that he was toothless.
Fines were never levied and there was no intention to do so, Betsy Bogart testified. In addition, a letter that appeared during the trial from former Secretary of State Alex Padilla warned Brown a few weeks before the law was signed that it was probably unenforceable.
“Any attempt by the Secretary of State to collect or impose a fine is likely to exceed his authority,” Padilla wrote.
The law required state-owned companies headquartered in California to have one member who identifies himself as a woman on the board of directors by the end of 2019. By January 2022, boards with five directors were to have two women and boards with six or more members were required to have three women.
The Women on Councils Act, also known as Bill SB826, provided fines ranging from $ 100,000 for failing to report on the composition of the California Secretary of State’s office to $ 300,000 for repeated denials of the required number of women. -members of the council.
The secretary of state’s office said 26 percent of California-based public companies said they met the quota of women council members last year, according to a March report.
Half of the 716 corporations required to comply with the law did not apply for disclosure.
Proponents of the law hailed it for achieving greater benefits for women. Other states followed California. Washington State took a similar measure last year, and lawmakers in Massachusetts, New Jersey and Hawaii have proposed similar bills. Illinois requires public companies to report on the composition of their boards.
Deputy Attorney General Ashante Norton said that in California, unsuccessfully tested alternatives to the law, which provides a chair for women. In 2013, for example, the legislature passed a resolution requiring companies to include women on boards, but few did.
Before the California law went into effect, women held 17% of the total seats on California corporation boards on the Russell Index of the 3,000 largest U.S. companies, according to the 50/50 Women on Boards advocacy group. By the end of last year, the percentage of council seats held by women had risen to 32% in California compared to nearly 27% in the country.
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