Overturn of corporate diversity quotas laws upheld in California appeals court
Both California state laws were previously vacated after being found unconstitutional
An appeals court on Monday upheld the termination of two California laws intended to force corporate boards to submit to diversity quotas.
Senate Bill 826 — passed in 2018 — instituted a quota of at least one woman on the board of directors for any company headquartered in California.
Assembly Bill 979 — passed in 2020 — established a similar quota for members of "underrepresented communities" inside California companies.
Demographics eligible for the quota included racial and sexual minorities.
LAW REQUIRING WOMEN ON CORPORATE BOARDS SETS 'GENDER-BASED QUOTA,' GROUP ARGUES
The gender, race, and sexuality quotas established by these bills were commensurate with the size of companies' boards of directors.
CALIFORNIA CORPORATE DIVERSITY LAW RULED UNCONSTITUTIONAL
For example, according to Assembly Bill 979, "a corporation with more than 4 but fewer than 9 directors to have a minimum of 2 directors from underrepresented communities, and such a corporation with 9 or more directors to have a minimum of 3 directors from underrepresented communities."
The California Appeals Court's termination of the quotas upheld previous rulings by lower courts.
Los Angeles Superior Court Judge Maureen Duffy-Lewis struck down Senate Bill 826 in May, writing in her opinion that the laws violated equal protection clauses in the California Constitution.
Los Angeles Superior Court Judge Terry A. Green struck down Assembly Bill 979 in April on similar grounds.