Advocating For California Employee Rights

California’s board diversity law struck down by a court

On Behalf of | Apr 14, 2022 | Employment Law

Assembly Bill 979, which became law in 2020, was heralded as a new springboard for racial diversity and equality in the workplace. It effectively required California-based companies to include corporate board members and directors from a variety of underrepresented minorities, including those of different races and those who are part of the LGBTQA community.

It only took about a month for a lawsuit to be filed against the new law – and less than two years for a Los Angeles County Superior Court judge to determine that the law was in violation of the state’s constitution based on the fact that it required quotas.

This isn’t the end of the road

California has always been progressive about eliminating workplace discrimination. It has long been recognized that having more minorities in the workplace – especially at the upper levels – can help. In 2018, the state began requiring public corporations to have at least one woman on their boards – and that caused the number of women in those positions to roughly double.

Despite this setback, the new law may survive. The state may appeal the verdict and overturn the court’s decision, or the law may be rewritten to avoid the use of quotas.

In addition, there’s help from higher up the ladder, as the Securities and Exchange Commission (SEC) has approved a new Nasdaq rule that will require companies to not only disclose diversity facts about their boards but make explanations about why they’ve failed to create diversity in their ranks if they haven’t.

This is a reminder that ending workplace discrimination is still an ongoing process. Increasing diversity in the workforce, management and executive levels is just part of the challenge. If you’ve experienced workplace discrimination, find out more about your legal options.