Judge Strikes Down California’s Corporate Racial Diversity Law

A California law that would have required corporations based in the state to include racial minorities and LGBT people on their executive boards was struck down by a judge in Los Angeles Friday.

The law was declared unconstitutional by a judge in the Los Angeles County Superior Court in a lawsuit brought by conservative legal organization Judicial Watch, the Associated Press reported. The ruling did not explain the Court’s reasoning.

The law was signed by California Governor Gavin Newsom in 2020. It would have required publicly traded companies headquartered in California to have at least one member on their executive boards of directors from an “underrepresented community,” which included African Americans, Latinos, Asians, Native Americans, or members of the LGBT community, by the end of 2021, either by adding an executive position or filling an existing vacancy. By the end of 2022, the law would have required companies with boards of 4-9 directors to have at least two directors from minority communities, and boards with 9 or more members to have at least three minority directors. Firms that did not comply would have faced fines of up to $100,000 dollars for first offenses and $300,000 for repeated offenses, AP reported.

The suit was filed by Judicial Watch in October 2020. The organization said that using taxpayer dollars to enforce “[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.” California defended the law by arguing that the measure did not “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.” Citing a report from the California Secretary of State, AP also reported that about 300 of the 700 corporations that fell under the law had complied, while half of the companies had not even filed a mandated disclosure statement on the racial makeup of their boards. But to date, no companies had been fined, and the state argued in Court that no taxpayer dollars actually had been used to enforce the measure.

“This historic California court decision declared unconstitutional one of the most blatant and significant attacks in the modern era on constitutional prohibitions against discrimination,” Judicial Watch President Tom Fitton said in a press release after the ruling. “In its ruling today, the court upheld the core American value of equal protection under the law. Judicial Watch’s taxpayer clients are heroes for standing up for civil rights against the Left’s pernicious efforts to undo anti-discrimination protections.”

Judicial Watch also filed a lawsuit in January that challenged another California law requiring corporations to put women on their corporate boards. The Daily Wire reported at the time:

The suit claims that the law violates the equal protection clause of the California state constitution by mandating a gender quota and that using taxpayer funds to enforce the law is illegal. The suit comes nearly three years after the law was initially signed, The Associated Press reported…

The law, passed and signed by Governor Jerry Brown in 2018, required that publicly traded companies whose headquarters are located in California have at least one member of their board of directors who identifies as a woman by 2019. By January of this year, companies with boards comprised of five members must have two women, and boards with six or more members must have three. Companies that do not report the gender composition of their boards face fines of $100,000. Companies that do not comply with the gender composition mandates face fines of $100,000 for a first offense and $300,000 for subsequent offenses.

Judicial Watch completed closing arguments in that case in February, according to their website.

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