More diversity quotas
California puts more controls on how corporations pick boards of directors
A conservative activist group is suing California over a new law that requires corporations with headquarters in the state to actively put racial minorities or LGBT individuals on their boards of directors.
Democratic Gov. Gavin Newsom signed the first-of-its-kind bill on Sept. 30. It carries a $100,000 fine for first-time offenders and $300,000 for repeated violations. Newsom argued the law is necessary to combat racial injustice and give minorities “a seat at the table.”
Judicial Watch sued California on Oct. 2 on behalf of three taxpayers, arguing the state cannot legally spend taxpayer funds enforcing the law.
“California’s government has a penchant for quotas that are brazenly unconstitutional,” Judicial Watch President Tom Fitton said. “Gender quotas and now new quotas for numerous other groups for corporate boards are slaps in the face to the core American value of equal protection under the law.”
California passed a similar law in 2018 requiring public companies to have at least one female board member by 2019. Companies with five or more directors must include two or three women by the end of 2021. In March, the California secretary of state reported 43 corporations failed to comply. Judicial Watch and a private shareholder in a California-based company have separately sued the state over the law, arguing it is unconstitutional to consider candidates based on sex. Opponents of the measure also say it demeans women by relegating them to “quota hires.” A trial is scheduled for next summer.
Under the new law, by the end of 2021 more than 660 public corporations must have at least one board member who identifies as LGBT or is from an “underrepresented community”: African American, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native.
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