At a Glance:
- A state court judge reported the California law that abides companies to include women on their boards as unconstitutional.
- Judge Maureen Duffy-Lewis from the superior court of Los Angeles, issued a decision in the favor of three California taxpayers who sought to block the enforcement of the law.
- The author of the bill, former California state Senator Hannah-Beth Jackson, stated that she believes the state will appeal the verdict and prevail.
Recently, a state court judge stated that the California law that abides companies to include women on their boards is unconstitutional. This comment has further pushed back the state’s efforts to diversify corporate leadership.
Judge Maureen Duffy-Lewis from the superior court of Los Angeles, issued a decision on Friday in the favour of three California taxpayers who sought to block the enforcement of the law. The similar is backed by the copy of the ruling.
The spokesperson from the California secretary of state commented that the office will be reviewing the judgment.
Challenging the law
In 2019, three taxpayers challenged the law stating it contributed to sex discrimination and is a violation of the state’s constitution.
The law was defended by California’s secretary of state where the argument states that the law was in the interest of gender diversity on boards and that the law was tailored to address the gap in women’s leadership.
The rule was passed in 2018-the statute required publicly held companies based in California to have up to three women directors, and allowed the secretary of state to issue fines of up to $300,000 per violation. No fines have been levied. The author of the bill, former California state Senator Hannah-Beth Jackson, stated that she believes the state will appeal the verdict and prevail.
Thoughts on the case
A renowned attorney, Jennifer Rubin, who counsels corporations on social and governance issues, expressed that the secretary of state faces a high bar in appealing the rulings. Rubin added, “The prudent course of action is for the legislature to go back and try to craft these laws in a way that is going to withstand scrutiny.”
