California Law Requiring Board “Diversity” Struck Down

(RepublicanInformer.com)- A law in California that sought to force diversity at companies that are publicly traded was struck down recently.

The law in question was to require all companies that are publicly traded to hire members to their boards from “underrepresented communities.” If they didn’t do so, they would face extreme fines from the state.

In response to that law being passed, Judicial Watch filed a lawsuit.

On Friday, Terry Green, a judge in the superior court of Los Angeles County, ruled that the law was in violation of California’s state constitution.

The New York Times previously reported that the California law would have required executive boards of these companies to hire multiple people who are from “several races and ethnic groups and people who identify as gay, lesbian, bisexual or transgender.”

When he made his ruling, Green didn’t provide any reasoning behind it. In another hearing, though, he said it was “a bit arbitrary” regarding the different groups the law was trying to help.

The law, known as Assembly Bill 979, officially went into effect back in 2020. It was passed back in 2018 when then-Governor Jerry Brown signed it into law. Current Governor Gavin Newsom subsequently said the law should be seen as a “victory for racial justice and empowerment.”

If the law were allowed to have remained in place, publicly-traded companies that have four to nine directors would have been required by the end of this year to have at least two directors from a minority community. Boards that had nine or more members on them would have to have at least three from minority communities.

Any business that chose not to comply with the law could’ve been punished with a fine of $100,000 for a first offense. Repeated offenses could have been subject to fines of $300,000, according to The Associated Press.

The AP reported that roughly 300 out of the 700 businesses that were subject to the law’s guidelines had already met the requirements. No companies had yet been fined for not complying.

Not long after the law officially went into effect, Judicial Watch filed a lawsuit to overturn it. In its suit, they claimed that any “[l]aws that explicitly distinguish between individuals on racial or ethnic, sexual preference and transgender status grounds fall within the core of the prohibition of the equal protection clause.”

In response to the lawsuit, California was arguing that taxpayer money was not being used in the enforcement of the law.

The state tried to argue that its diversity law 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.”

Judge Green obviously didn’t agree with that argument.

There has been no word as of yet whether the state of California would be appealing this ruling. For now, though, the state won’t be allowed to enforce the law at all.