California's corporate diversity law ruled 'unconstitutional'

A Los Angeles judge ruled Friday that California's law mandating that corporations diversify their executive boards with members from certain racial, ethnic, or LGBT groups is "unconstitutional."


In a decision handed down Friday, a judge in Los Angeles, California, struck down the state's corporate diversity law that would have required corporations based out of the progressive Golden State to include racial minorities and members of the LGBTQ community on their executive boards, ruling it "unconstitutional."

California's Assembly Bill No. 979 was approved by Gov. Gavin Newsom and signed into law on Sept. 30, 2020. Because of what progressive lawmakers saw as a general lack of representation of American minorities on corporate executive boards, the law would have required corporations to hire members of "underrepresented communities" proportional to the size of the entity.

If a corporation had nine or more officials on its board, it would have been required to have at least three members of "underrepresented communities."

If that number was five to eight, the requirement would have been two. And if the board had four members or fewer, at least one of those members would have to meet the requirements. Meanwhile, noncompliance would be costly.

According to its design, an initial violation of the law would result in a $100,000 fine. Additional offenses would be $300,000 or more for each repeat violation.

The "corporate diversity law," as it came to be known, had been challenged by Judicial Watch, a conservative legal watchdog organization that filed a permanent injunction against the measure. The organization's argued it was unconstitutional to enforce a law violating the equal protection clause of the state's Constitution.

That, Judicial Watch argued, was directly opposed to the Californian law as it granted a specific requirement that would unevenly elevate individuals of a certain demographic through a piece of legislation. The 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 statement while responding to Friday's ruling.

The court has not yet published its reasoning for its verdict.


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