In 2020, Calfornia Gov. Gavin Newsom signed a law that required publicly held companies within the state must include at least one member of an “underrepresented community” on their board by the end of 2021. Furthermore, the law requires at least two such directors by the end of 2022 on boards with four to nine directors and three directors are required for boards with nine or more directors.
Diversity On Boards notes 300 out of 700 companies have complied with the law. Gov. Newsom spoke about the importance of the law at the time of signing.
“When we talk about racial justice, we talk about empowerment, we talk about power, and we need to talk about seats at the table,” Newsom said.
According to the Associated Press, the diversity initiative was struck a blow by a Los Angeles judge. On Friday, the judge ruled the law mandate was unconstitutional. The ruling itself didn’t explain the judge’s reasoning. The lawsuit was brought forth by a legal group called Judicial Watch who argued this measure “violated the equal protection clause in the state’s constitution.”
“This historic California court decision declared unconstitutional one of the most blatant and significant attacks in the modern era on constitutional prohibitions against discrimination,”
With the state’s defense, the argument is the law is necessary to reverse the “culture of discrimination” and was only put into place when “all other measures failed.”
In its court filings, the state argued the measure 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,” per AP.