Quota

California Sued Over Law Requiring Corporations To Adopt Woman Quotas

The Pacific Legal Foundation is arguing that a California law mandating corporate boards have a minimum number of women amounts to unconstitutional sex discrimination.

|

A new lawsuit is challenging a California law that requires corporations to elect a minimum number of women to their boards of directors.

On Wednesday, the Pacific Legal Foundation (PLF) sued California Secretary of State Alex Padilla, the state official in charge of administering SB 826. That law, passed in 2018, requires that, by 2020, all publicly traded companies headquartered or incorporated in California have at least one woman on their board of directors.

Come 2022, companies with five-member boards will need to have at least two female directors. Firms with six or more directors will need at least three women on their board.

Failing to fulfill the law's gender quota or to properly report the composition of their boards to the state can net companies fines of $100,000 for the first violation, and $300,000 for each subsequent violation. Each board position required to be occupied by a woman, but isn't, counts as a separate violation.

The purpose of the law, according to its sponsor, state Sen. Hannah-Beth Jackson (D-Santa Barbara), is to make the top of the corporate ladder more equal and to improve corporate decision making.

"The time has come for California to bring gender diversity to our corporate boards," Jackson told the Los Angeles Times in September 2018. "With women comprising over half the population and making over 70% of purchasing decisions, their insight is critical to discussions and decisions that affect corporate culture, actions, and profitability."

Whatever the intentions behind the law, its means are both unconstitutional and counter-productive, says Anastasia Boden, an attorney with the PLF.

"Equality is meant to allow people to be more than their immutable traits," Boden tells Reason. "This law reduces women to their immutable traits."

Boden and PLF are suing on behalf of their client, Creighton Meland, Jr., a shareholder of California-headquartered OSI Systems, Inc., a defense contractor that currently has an all-male board.

By forcing Meland and other shareholders to consider gender when they vote for board members, reads their lawsuit, California's law "imposes a sex-based quota directly on shareholders, and seeks to force shareholders to perpetuate sex-based discrimination." This, they argue, violates the Equal Protection Clause of the 14th Amendment.

The potential constitutional flaws of SB 826 are not news to anyone. Even supporters of the bill have acknowledged that it might not withstand legal challenge.

"There have been numerous objections to this bill, and serious legal concerns have been raised," wrote then-Gov. Jerry Brown in a statement after signing the bill into law. "I don't minimize the potential flaws that indeed may prove fatal to its ultimate implementation."

In addition to the PLF's federal lawsuit, there is also a state-level challenge to the law.

That lawsuit was filed by three California taxpayers with the assistance of conservative group Judicial Watch. It argues that the appropriations necessary to enforce the law violate the state constitution by expending money on an explicit gender quota.

NEXT: Pending Ban on Flavored E-Cigarettes in Massachusetts Authorizes Forfeiture of Vapers' Cars

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

Please to post comments

121 responses to “California Sued Over Law Requiring Corporations To Adopt Woman Quotas

  1. So weird how every company in california suddenly had a male to female transgender board member…

    1. Oh, come on, I’m sure a few 20-person boards suddenly gained a director of catering, a director of board logistics, and a director of decorating.

      1. Right but they need women not gay men

        1. My bad, Director of Sandwiches.

          1. Director of I’m mad but won’t tell you why

            1. You know

          2. Director of I’m not hungry but will eat half of yours

          3. Sammiches

          4. Director of Bad Driving

        2. No, that’s incorrect, they did in fact consider trans people to be equal to a person born as a female. But I was saying last year that this will create the “token woman.” ????

      2. Director of Mansplaining in falsetto

    2. Does Joe Biden have a daughter?

      1. someone’s … in a basement somewhere

  2. Dear California:

    Delaware thanks you.

    Hugs & Kisses,
    The Diamond State

    1. Incorporate in Wyoming. Even better.

  3. This, they argue, violates the Equal Protection Clause of the 14th Amendment.

    OLD WHITE MEN ARE USING OUR THING AGAINST US!

    1. Maybe when they’re done with this, they can go after all the other discriminatory hiring practices imposed by the federal government that mandate the hiring of quotas by gender and race.

      I recall one factory that operated in Pennsylvania. The ower was hisplanic and about 80% of the employees were hispanic as well. The company did a lot of government contracting, All was going smoothly until one day a government moron showed up to complain that they hadn’t hired enough blacks. The dispute went a few rounds and finally, the owner decided to completely shutter the business rather than yield to government extortion.

      So what did the government accomplish? A couple hundred unemployed people drawing government welfare benefits.

      In the final analysis, government pretty much destroys everything it touches.

  4. The law does seem rather fascistic. But I expect nothing less from today’s Democrats.

  5. What if voting shareholders fail to cooperate?

    A funny thing I read that relates a bit to this. In Scandinavia when they started having quotas like this, a lot of companies had to recruit female executives from the (supposedly less enlightened) US because they just didn’t have enough qualified candidates.

    1. What qualifications? The only qualification is to be (or claim to be) female. Period.
      Like our illustrious political example, Hunter Biden, actual knowledge, even of the language, is not necessary.

      1. The only qualification is to be (or claim to be) female. Period.

        I see what you did there.

      2. Well, no, they apparently did have other requirements because they didn’t just hire whatever warm female body they could find near at hand, but sought out actual capable executives.

        1. Can confirm, Scandinavian women do not have warm bodies.

      3. It’s an echo of the problem airlines faced when the government mandated quotas of black pilots. There were not enough blacks in America who were qualified, even including offers to fully train applicants from zero knowledge to airline pilot.

        In the end, they went down to an African country and essentially strip-mined the airline industry there. “Hey! We got black guys now – but we had to go to Africa to get them!”

        My understanding is that they flew for the US airlines for a while, made a pile of money, then just went home. In the end, as usual, the government accomplished nothing.

        http://www.adversity.net/united/default.htm

        As for female quota hires, my brother (airline pilot) has told me several. Some are hilarious – until you think of the safety implications. One I didn’t think was funny at all was the story of the female flight deck member responsible for fuel balancing during a coast-to-coast flight. Fuel in aircraft has to be burned from specific tanks in a proper sequence, or some of the fuel becomes inaccessible which can affect the range of the aircraft. The female screwed up and left fuel in the wrong tanks, which meant that the aircraft could no longer reach its destination and would have to stop to refuel. But rather than tell the captain and allow him to make arrangements for a landing, the female instead falsified the fuel consumption information leading the captain to believe all was well. Somewhere along the line, the caption tumbled to what was going on and made a forced landing in Colorado.
        Some of the funnier stories revealed that the females have NO IDEA how the aircraft systems actually work. Many aircraft have a device called a “totalizer” which measures fuel consumption from all sources on the aircraft. The dial is set to the total fuel, and counts down as fuel is consumed. The female flight deck member’s fuel consumption reports were consistently in error by a small amount, so the captain queried the woman about her methods. She explained that she would total up the amount of fuel on board and dial almost that amount into the totalizer. “Why not the full amount?” the captain asked.
        “Oh no”, the stupid woman replied, “If I did that, all the fuel would be in the totalizer tank, and none of it would be able to get out to the engines”. She thought that by turning the little wheel, she was moving thousands of gallons of jet fuel into a tank that didn’t exist.

        1. Compounding the problem is that the companies, faced with such incompetence, never get rid of the offending nincompoop.
          To do so would effect their quota ratio, so the rest of the employees are told they must compensate for the unqualified people.
          I know, I was on the receiving end of such an order.
          This is the case for all forms of quota-filling hires.
          Meanwhile, those minority, and women employees, that are actually competent, get lumped into the category of affirmative action hires with the attached suspicion that they aren’t any good.

    2. What if voting shareholders fail to cooperate?

      That’s a good question. I guess at least one board seat has to be the “woman’s” seat, so that as long as a woman is nominated and gets at least one vote, she’ll be on the board.

      Of course, if I were a stockholder, I’d call bullshit on that and sell my stock. I’m not letting some woke bureaucrat tell me that I have to have a token of some particular “victim group” on the board of a company I’m invested in.

      1. Most board members are not selected by shareholders, they are done by proxy.

  6. And this comes at a time when we are rejecting the idea that there is an objective definition of “woman”.

    1. We’re in compliance. These women are 50% of our board of directors.

      They’re just a bowling ball, a coffee mug, and a Chia pet.

      They all identify as women.

      They’re inanimate objects. They’re incapable of identifying as anything.

      That’s extremely offensive. How dare you!

      1. Now, please leave before I’m forced to call our Director Of Security, “Eedie”

      2. “They’re inanimate objects…”
        So are guns, but you assholes keep accusing them of committing violence.

    2. “we are all women now”.

  7. For the state to require as minimum number of people by sex is itself sexist

    1. I see that rules of grammar are also tools of monopolistic state oppression, in your view.

  8. “violates the Equal Protection Clause of the 14th Amendment”

    Which Fourteenth Amendment – the one that’s actually written, which explicitly accommodates sex discrimination (in Section 2) and that they used to think needed a new Amendment to bring it up to date?

    Or the Supreme Court’s version of the 14th Amendment, which erases all legal distinctions the judges don’t like while leaving other distinctions in place?

    1. Catty!

  9. Hey, we had strippers at our last board meeting, what more do you people want?

    1. Were at least two of them *female* strippers?

      1. Our company is small enough that we only need one.

        1. “In this company, everyone has to spend a day in the barrel.”

      2. If we asked, it would have violated anti-discrimination laws.

      3. one named Lola …

        1. She nearly broke my spine.

          1. Extra-large implants can be dangerous during a lap dance.

            1. “any more than a handful and you’re risking a sprained tongue”

  10. How is this in any way different from requiring companies to service gay weddings; or hire gay employees; or hire disabled employees; or make their buildings handicap accessible; or affirmative action? That’s the problem. Once you’ve accepted that logic you don’t get to pick and choose. This is the bed you made. Luxuriate in it.

    1. How is this in any way different from requiring companies to service gay weddings; or hire gay employees; or hire disabled employees; or make their buildings handicap accessible; or affirmative action?

      Have you serviced a lot of gay weddings or hired any women or disabled people?

      1. “serviced” gay weddings? How? Asking for a friend.

        1. “serviced” gay weddings? How? Asking for a friend.

          Right. I’d assume there are a lot of ways that hiring a woman is different than servicing a gay wedding but I’m pretty sure I’m missing some assumptions.

    2. Those come next. Gradualism is the key.

  11. Scientific studies show that diversity improves decision making. A corporate board that looks like America would therefore guarantee increased profitability. So this is an example of the government forcing corporations to do what is in their own interest anyway. As a left-libertarian, I support the law.

    #LibertariansForQuotas

    1. Left-libertarian is an oxymoron… or just leave out the oxy part.

      1. It’s a bad parody. It’s not meant to be coherent.

        1. Yeah, there’s some other satirists around here who can be entertaining, but OBL is certainly no Vermin Supreme.

        2. It’s a bad parody.

          IDK, I found ‘#LibertariansForQuotas’ to be pretty amusing.

          1. When he’s not myopically pushing a single dead horse point, he’s okay. The fact that he can’t resist the temptation to twist the narrative to fit his agenda, however, makes him a bad parody. It’s really up to him.

        3. It can’t be that bad, if he can get people to reply like he’s serious.

          I did like the “own interest” comment.

    2. Scientific studies also show that corporations lose (perceived) value when the add women just to fulfill quotas…

  12. “The Pacific Legal Foundation is arguing that a California law mandating corporate boards have a minimum number of women amounts to unconstitutional sex discrimination.”

    Which it obviously is, as ‘affirmative action’ is racial discrimination. Championed by that supposed ‘party of science’, the Ds.

    1. Everyone who has a working brain cell and supports any kind of affirmative action knows it’s discrimination. They just don’t care.

      1. It’s the OK kind of discrimination, because it makes people feel good inside. Like when black people sing about Jesus — it’s the OK kind of Christianity.

        1. There is a black ‘something’ (priest? deacon? pastor? – IDK) of a Baptist church in SF.
          He’s gotten to be a doddering old fool but he’s black and reliably compliant with the D-bullshit which makes up most of SF’s government activity.
          He’s been appointed to every ‘advisory board’ in the city where they gas-bag each other and do absolutely nothing: Black and doesn’t make waves; perfect for SF’s version of ‘diversity’.

  13. The Pacific Legal Foundation is arguing that a California law mandating corporate boards have a minimum number of women amounts to unconstitutional sex discrimination.

    And they’re 100% correct. Possibly even 200%

    1. I thought the Equal Protection clause of the 14th amendment had not yet been incorporated.

      1. Subtle.

  14. woman quotas is awesome.

  15. So serious question, what if a guy on the board claims to identify as a woman? And that’s it, doesn’t change up his lifestyle, clothes, etc. Does the state have to go pound sand, or are they going to try to make rules as to what constitutes a woman? I feel like this would be a fun experiment to watch

    1. so many minds blown end result would be black hole where California was.

      1. All in favor – – – ?

    2. It works for track and field.

      1. And bicycle racing.

    3. To qualify as a women-owned small business, or WOSB, your business must meet the following requirements:

      Your company must qualify as a small business based on SBA small business size standards. The standards are usually stated in terms of employee size and/or annual revenue, and vary depending on your industry code.
      Your company must be 51 percent owned by women who are U.S. citizens.
      Women must manage the operations on a daily basis.
      Women must make long-term decisions for the company.
      A woman who works full-time for the company during normal work hours must hold the highest officer position in the company.
      There are no rules governing time in business.

      Waiting, and wondering if some dude with a 5-o’clock shadow has or will show up on the doorstep demanding certification.

      1. Waiting, and wondering if some dude with a 5-o’clock shadow has or will show up on the doorstep demanding certification.

        Dude Dudette Dudex with a 5-o’clock shadow and xer latinx partner, Raul, who does not habla. Why make it easy?

        1. +1 for dudex. I intend to use it in the future.

      2. Yabba dabba doo!

      3. So actual ownership doesn’t mean much. No surprise.

    4. Serious answer: it’s to score points. Their reaction will depend on a calculus as to whether they’ve scored enough already or could score even more (or lose some) by reacting.

    5. I believe the statute defines “woman” to include any person who “identifies” as a woman. And I also believe the statute states that the company is in compliance if it has the requisite number of women on the board at any time during a given year.

    6. Well the plaintiff attorney mentions:

      “This law reduces women to their immutable traits.”

      I think that would imply XX. But only her hairdresser knows for sure.

    7. That is in fact part of the law, transwoman are allowed. #tokenwoman

  16. Glad they found a dinosaur to challenge the law. The only sort of company where this is even remotely a legitimate law is a subsidiary that is a significant government contractor. Otherwise, this legislation is pretty obviously (just reading the bill text ) noodgy crap. And prob nothing more than a ‘let’s provide plenty of well-paid cushy do-nothing jobs for our term-limited women critters so we can recruit more of them to run for office in the first place’.

  17. It’s just affirmative action. If that’s legal, this is legal; and contrariwise.

    1. So what happens when the shareholders (especially those outside of CA), fail to put a woman on the board?

      1. At least 51% of shareholders must be women. Oh heck. Make it 71%.

      2. Accuse the existing make board members of sexual harassment and force them to step down. Eventually they’ll find one.

    2. Yep… if PLF wins its lawsuit, I’m going to enjoy watching everyone twist themselves into knots explaining why THIS affirmative action is different from THAT affirmative action.

  18. Nothing says competent reliable and exemplary more than a legal requirement for your presence.

  19. Must board members be human? Director of Kibble?

    1. “The time has come for California to bring species diversity to our corporate boards. With insects comprising over half the population ….”

    2. Interesting question. In certain circumstances, board members must be fiduciaries. That requires them to be professionally and mentally competent to exert a prudent standard of care including financial and business acumen. At a minimum, you’d have to be able to count, maybe add and subtract. Board members are also required to be independent in their judgements (at least some of the time) so no Clever Hans‘.

      I’m not sure how many non-human candidates that leaves. Dolphins, maybe? But clearly we need a quota for them, too.

  20. Based on the excellent job California has done in regulating PG&E so that there is always money for line area maintenance, and in the excellent regulating of housing availability through zoning and green energy mandates, this should go quite well.

  21. So if Rupaul get on a board, does that count?

    1. Nah, RuPaul doesn’t claim to be a woman.

  22. Why is that guy in the photo leaning over?

    Oh, I see, he wants to get a better look at…the quarterly reports.

    1. seriously, chicks are more fun to look at all day anyway

      1. That depends greatly on the aesthetic qualities of said “chicks”.

        1. in general all the chicks have aesthetic qualities > a room full of dudes. even in suits.

    2. “Oh, I see, he wants to get a better look at…the quarterly reports.”

      In her case, looks more like the monthlies.

  23. Why do companies even try to operate in California?

    1. Entrepenurs are thrill seekers.

  24. It might be cheaper to pay the fines than hire a woman

    1. Well, only if they left the seat empty. But it’s definitely possible that a company might feel using superior candidates could be worth the fines if it results in better governance. Personally I think the average board member isn’t adding a ton of value, not enough to justify six figure fines, but I’m not a shareholder of a large corporation so my opinion on the subject is mostly irrelevant.

    2. How often are the fines imposed? Monthly? Why not just identify as a woman? Tell them you just had your period.

  25. “Women are inherently disabled, and so we have to force corporate California to install a wheelchair ramp for them on the corporate ladder”
    /state Sen. Hannah-Beth Jackson (D-Santa Barbara)

  26. Brown: “…serious legal concerns about this bill…”?? What about the morality of forcing gender discrimination and forcing a business into management by govt.? What about the initiation of violence and threats against people just because they run a business? Why does a businessperson lose their rights by virtue of being in business?

    1. That’s moonbeam you’re discussing; ’nuff said.

    2. Haven’t you been paying attention?
      Being in business means you have opened a “public accommodation”.
      You can’t go picking, and choosing, who you do business with, or who you hire or fire. You are controlled by government in virtually every decision you make.
      As an aside; the definition of socialism is “government controlling the means of production”.
      How close are these “public accommodation” laws to fitting that definition?

  27. Is that “woman” by gender, by sex, be choice, by biology, by certification, by assignment, by …….?

    1. by legislation?

  28. Do women board members on maternity leave count toward the quota?

    1. Priceless, Hit and Run! You know how to get down to the nitty-gritty of these issues.

  29. Won’t there soon be requirements for all races, genders, gender variations, and racial variations. What about a requirement for black, native Americans, and oriental folks? Should not they be represented proportionally also? What about marriage licenses in California? Shouldn’t they be racially balanced?

    “Sorry, folks, we’ve given out too many marriage licenses to white couples this month. For the next few weeks only mixed, oriental, black and native American couples may marry.”

    1. I wonder how many people are familiar with this section of the Civil Righs Act of 1964: SEC. 703(j) Nothing contained in this title shall be interpreted to require any employer, employment agency, labor organization, or joint labor-management committee subject to this title to grant preferential treatment to any individual or to any group because of the race, color, religion, sex, or national origin of such individual or group on account of an imbalance which may exist with respect to the total number or percentage of persons of any race, color, religion, sex, or national origin employed by any employer, referred or classified for employment by any employment agency or labor organization, admitted to membership or classified by any labor organization, or admitted to, or employed in, any apprenticeship or other training program, in comparison with the total number or percentage of persons of such race, color, religion, sex, or national origin in any community, State, section, or other area, or in the available work force in any community, State, section, or other area.
      It was extensively debated, because the lawmakers at the time were concerned that such activity could result.
      When it was brought up in the courts, to try to stop “affirmative action”, it was met with a resounding “meh”

  30. I remember reading an essay from Thomas Sowell on a labor union case in which a more senior white man was passed up for a promotion so a black man took his place. The white man filed a race discrimination suit. If I remember correctly the supreme court(?) ruled that the spirit of the non-discrimination law was meant to tilt the table in minorities’ favor, so the law was not violated.
    That’s relevant to this, as a justice, so inclined, can ignore the plain meaning of a law, in favor of the supposed purpose of it.
    I wish I could find the article, but my googling is not yielding any results.

    1. So the mighty Google is tilting search results?

  31. What??? Where’s the CA law requiring an equal number of men on the board of every single Feminist group in CA!!!

  32. If I were a Democratic Primary debate moderator, I would ask all of the candidates a simple question:

    “Are men and women different?”

    1. If I were a Democratic Primary debate moderator, I would ask all of the candidates a simple question:

      “will you accept the results of the 2020 presidential election?”

  33. Thanks for sharing….very helpful and knowledgeable.
    Thanks
    army status

  34. “With women comprising over half the population and making over 70% of purchasing decisions, …”

    So despite earning far less than men women have greater spending power. I guess she’s going after that 30% women don’t yet control.

    Why isn’t the ACLU opposing this law.

Comments are closed.