California passed two laws that require diversity for certain corporate boards. The first required diversity based on gender and the second for “underrepresented communities.” The effective date and required amount of representation varies based on board size. In two separate actions, each law was found unconstitutional.
The underlying challenge is these laws violate the equal protection laws since each law is declaring different treatment of equal people based on sex or other protected characteristics such as national origin or ancestry. For these laws to pass muster, they must be found to correct unlawful conduct, not merely a societal history of unfair under representation.
This issue is far from over. California’s Secretary of State has already announced these cases will be appealed. Regardless of what happens in California, other states are likely to follow suit. Of course, if the laws are ultimately upheld, the number of states to follow suit will likely increase dramatically. Time will tell.
Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560
