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California law requiring female board directors deemed unconstitutional

The ruling is one of several legal challenges to California's efforts to diversify boards of directors.

LOS ANGELES (CN) — California's requirement for a minimum number of women on the boards of corporations headquartered in the state violates the constitutional rights of men, a state court judge has found.

Los Angeles County Superior Court Judge Maureen Duffy-Lewis on Friday issued a verdict in favor of a group of California taxpayers, backed by conservative activist organization Judicial Watch, who had sued in 2019 to block the state from using public funds to enforce what they said was an unconstitutional statute.

The judge agreed with the plaintiffs that there was no compelling state interest to support a law that discriminates between men and women. The state, the judge said, had failed to sufficiently prove that the law's use of a "gender-based classification" was necessary to boost California's economy, to improve opportunities for women in the workplace, and to protect California taxpayers.

"Neither plaintiffs nor defendant have identified any case in which boosting the economy, improving work opportunities for women, protecting taxpayers, public employees and retirees, or even improving corporate performance or corporate governance, was found to be a compelling governmental interest that justified the use of a suspect classification," Duffy-Lewis wrote.

A spokesman for the California secretary of state, the defendant in the case, said its counsel was reviewing the decision.

California became the first state in 2018 to require gender diversity on corporate boards of public companies. The law, Senate Bill 826, stipulated that corporations headquartered in California were to have at least one woman on their board by 2019 and, depending on the size of the board, two or three women by the end of 2021. A subsequent state law required California-based corporations to also have at least one member of a underrepresented community on its board by the end of 2021 but was also struck down.

The Judicial Watch-backed challenge to SB 826 was conducted as a bench trial, without a jury.

California has argued the law doesn't discriminate against men as the plaintiffs claimed because there's no need to replace men with women on boards of directors.

"By the plain text of the statute, SB 826 does not discriminate against men," the state said in a posttrial brief. "SB 826 sets a
modest diversity floor and provides that California’s publicly held corporations may increase the number of directors on their boards to comply with its requirements."

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