A corporation to succeed has to have the best possible leadership. In California, the Democrats have decided corporations do not have to be successful—just have the “right” type of people on their Board of Directors. Another reason for California companies to leave the State—they want quality people—not discrimination.
“The law requires corporations to include at least one member of an underrepresented community on their boards of directors by Dec. 31 of last year, either by adding a seat or filling a vacant one. By Dec. 31 of this year, each corporation must include a minimum number of such members based on the total size of the board.
A “Diversity on Boards” report issued in March by the secretary of state found that about 300 out of some 700 corporations had complied. However, half of the corporations didn’t file the required disclosure statement.
Now this route to failure has been declared unconstitutional.
California corporate diversity law ruled unconstitutional
Corporations were required to comply by Dec. 31 of last year
Fox News, 4/1/22
LOS ANGELES — A Los Angeles judge ruled Friday that California’s landmark law mandating that corporations diversify their boards with members from certain racial, ethnic or LGBT groups is unconstitutional.
The brief ruling granted summary judgment to Judicial Watch, a conservative legal group that sought a permanent injunction against the measure that was signed into law last year. The ruling didn’t explain the judge’s reasoning.
The measure requires corporate boards of publicly traded companies with a main executive office in California to have a member from an “underrepresented community,” including LGBT, Black, Latino, Asian, Native American or Pacific Islander.
The lawsuit argued that violated the state’s constitutional equal protection clause.
The decision “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.
Messages seeking comment from the state weren’t immediately returned Friday evening.
However, in its court filings, the state argued that the measure didn’t “discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting.”
No companies have been fined, however, and the state argued that no tax dollars actually had been used to enforce the measure.
The law requires corporations to include at least one member of an underrepresented community on their boards of directors by Dec. 31 of last year, either by adding a seat or filling a vacant one. By Dec. 31 of this year, each corporation must include a minimum number of such members based on the total size of the board.
A “Diversity on Boards” report issued in March by the secretary of state found that about 300 out of some 700 corporations had complied. However, half of the corporations didn’t file the required disclosure statement.
A related Judicial Watch lawsuit in Los Angeles is challenging another state law requiring a woman director on corporate boards.
That three-year-old law was on shaky ground from the get-go with a legislative analysis saying it could be difficult to defend and then-Gov. Jerry Brown saying he was signing it despite the potential for it to be overturned by a court.
The state defended the law as constitutional, saying it was necessary to reverse a culture of discrimination that favored men and was only put in place after other measures failed.
