Legal Alerts

California Court Strikes Down “Women on Boards” Law, Eradicating Recently Instituted Gender-Based Quotas for Board Seats

Los Angeles, Calif. (May 25, 2022) - Last week, a California Superior Court Judge struck down California’s “Women on Boards” law. The law, passed in 2018, required that California-based, publicly-held corporations seat women on their boards of directors. At the time of passage, approximately 25% of California corporations had no women serving on their boards of directors, and many advocates credit the law for having changed the landscape and increased gender diversity. The state also had the authority to levy significant fines against non-compliant companies. However, Los Angeles-based judge Maureen Duffy-Lewis ruled last week that the law violated the California Constitution. In a lawsuit filed by three California residents against the Secretary of State, the plaintiffs sought an order striking down the law as violative the California Constitution’s equal protection clause. The court agreed with the plaintiffs, reasoning that gender-based quotas are only legal when the state can show a “narrowly-tailored, compelling government interest,” and the state had failed to meet its legal burden to survive judicial scrutiny.

Legal experts expected this outcome, especially in light of recent decisions from other California judges. Judge Duffy-Lewis’ ruling came approximately one month after another judge struck down a law mandating that corporate boards diversify with members from different racial, ethnic, and sexual orientation/gender identity groups. David Levine, a law professor at University of California Hastings, told ABC News that “mandating a quota like this was never going to fly.”

While this means that the law will no longer require California-based, publicly-held corporations to diversify their boards, companies may continue to volitionally diversify their boards if their company shares the stated goals of the “Women on Boards” law. Additionally, the law only makes unlawful state-mandated quotas. Such companies may maintain internal policies to meet self-determined diversity targets. Each individual company’s approach to the composition of their board of directors should be informed by the company’s mission statement, the sentiments of their shareholders, and the requirements of their internal governance documents, such as company bylaws.

Lewis Brisbois’ attorneys are available to provide advice, assistance, and counsel to California corporations seeking guidance on these matters. For more information, contact the author or editor of this alert, or visit our Labor & Employment Practice page to find an attorney in your area.

Author:

Andrew S. Levine, Associate

Editor:

Thalia S. Rofos, Partner

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• Labor & Employment
• Corporate

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