SACRAMENTO – A lawsuit filed in October by the Pacific Legal Foundation is challenging the state’s requirement by way of Senate Bill 826 that publicly traded companies are to have a certain number of women on their boards of directors. The law is the first of its kind in the nation.
“In 2020, all publicly traded companies incorporated or headquartered in California will be required to meet a quota of female board members or face fines,” opens the lawsuit. “This ‘woman quota’ (SB 826) applies to all businesses across every industry. It applies in perpetuity and irrespective of whether there is any evidence of discrimination in the relevant industry. The law is not only deeply patronizing to women, it is also plainly unconstitutional.”
The lawsuit was filed in the U.S. District Court for the Eastern District of California on Nov. 13 against California Secretary of State Alex Padilla. Creighton Meland Jr., an Illinois resident and shareholder of California-headquartered OSI Systems, is the plaintiff.
The Northern California Record reached out Padilla's office for reaction to the lawsuit. The office said it could not comment on pending litigation, but supports the bill.
“We support the underlying goal of SB 826 to create an equitable economy and inclusive California. We will review the lawsuit and will respond in court,” said spokeswoman Paula Valle.
Women hold less than a third of executive positions in corporate America and white men hold 63 percent, according to recent reports. While California was the first to adopt such a measure, five other states have followed by passing similar but less stringent bills.
“This law puts equal numbers above equal treatment,” said Anastasia Boden, a senior attorney at Pacific Legal Foundation, in a press release. “This law is built on the condescending belief that women aren’t capable of getting into the boardroom unless the government opens the door for them. Women are capable of earning a spot on corporate boards without the government coercing businesses to hire them.”
Founded in 1973, Pacific Legal Foundation is a national nonprofit legal organization that “defends Americans threatened by government overreach and abuse,” according to its mission statement.