A California court struck down a law that set quotas for women board members for publicly held corporations headquartered in the state.

The Women on Boards Law, Senate Bill 826, assessed fines of $100,000 for companies that did not report information about the composition of their board to the California Secretary of State, with fines up to $300,000 for boards that failed to meet quotas.

The lawsuit was filed on behalf of three state taxpayers by Judicial Watch, who said the law violated the Equal Protection Clause of the California Constitution, which prohibits discrimination against or preferential treatment to individuals or groups based on “race, sex, color, ethnicity, or national origin.”

Judicial Watch President Tom Fitton said:

The Court eviscerated California’s unconstitutional gender quota mandate. This is the second California court decision finding that quotas for corporate boards are unconstitutional. The radical Left’s unprecedented attacks on anti-discrimination law has suffered another stinging defeat.

Fitton is referring to a decision in April 2022, when another California judge struck down legislation that imposed racial, ethnic and LGBT quotas on boards of directors, as reported in The Daily Citizen by judicial analyst Bruce Hausknecht.

Judicial Watch explained the case, saying:

The lawsuit challenges a 2018 law, known as Senate Bill 826, which requires every publicly held corporation headquartered in California to have at least one director “who self-identifies her gender as a woman” on its board of directors by December 31, 2019. The law also requires corporations to have up to three such persons on their boards by December 31, 2021, depending on the size of the board.

Judicial Watch is a conservative, non-partisan educational foundation that “seeks to ensure that political and judicial officials do not abuse the powers entrusted to them by the American people.”

California Superior Court Judge Maureen Duffy-Lewis explained that the defendants claimed three compelling state interests for the law:

(1) S.B. 826 was passed to eliminate and remedy discrimination in the director selection process for publicly held corporate boards in California.

(2) S.B. 826 was passed to increase gender diversity on the boards of publicly held corporations to benefit the public and the state economy.

(3) S.B. 826 was passed to increase gender diversity on publicly held corporations headquartered in California to benefit and protect California taxpayers, public employees and retirees.

But Judge Duffy-Lewis stated:

The State must have a strong basis in evidence to conclude that remedial action is necessary before it embarks on a program to remedy discrimination, and the discrimination cannot merely be conceded. Generalized assertions of discrimination in a particular region or industry are insufficient to give rise to a compelling governmental interest, as are mere statistical anomalies, and the discrimination must be identified with specificity.

She pointed to evidence that suggested quotas don’t generate “additional benefits,” like affecting “company performance,” boosting the economy, improving “opportunities for women in the workplace,” or protecting “California taxpayers, public employees, pensions, and retirees.”

The judge said the goal of the legislature in passing SB 826 was not “remedying discrimination,” but “gender balancing,” adding:

There is no Compelling Governmental Interest in remedying discrimination in the board selection process because neither the Legislature nor Defendant could identify any specific, purposeful, intentional and unlawful discrimination to be remedied.

Instead of alleviating specific discrimination or benefiting the state in a real way, she said quotas just create “more diverse boards.”

Which brings up some good questions: Is diversity an end in itself? Or should it serve a higher purpose? And, should the state be responsible for enforcing equity?

SB 826 was passed in 2018 and signed into law by then-Governor Jerry Brown, who signed the bill “because he wanted to send a message during the #MeToo era,” The Associated Press reported.

Former California Secretary of State Alex Padilla had “warned Brown weeks before he signed the law that it was probably unenforceable,” and no corporations were penalized because of the law.

Judicial Watch’s Fitton was grateful for the ruling, saying:

Thankfully, California courts have upheld the core American value of equal protection under the law. Judicial Watch’s taxpayer clients are heroes for standing up for civil rights against the Left’s pernicious efforts to undo anti-discrimination protections.  Judicial Watch’s legal team has helped protect the civil rights of every American with these successful lawsuits.

The case is Robin Crest et al. v. Alex Padilla.


California Law Requiring Racial, Ethnic and LGBT Quotas for Private Companies’ Boards of Directors Struck Down

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