Legal questions raised over SB826’s potential discrimination

On Behalf of | Dec 3, 2021 | Employment Law

In any workplace, it is reasonable to want to have both men and women working in advanced roles. To prevent boards from only having men on them, California has gone as far as to establish a law that requires women on corporate boards.

Now, on December 1, an attorney has gone to trial to fight against that law being undone. People who argue against the rule say that it is illegal to use taxpayer funds to enforce laws violating the equal protection clause in the California Constitution. The equal protection clause does not support requiring a specific gender in a position. Proponents argue that requiring women on corporate boards actually discriminates against men while attempting to stop discrimination against women.

What does the current law do?

In 2018, around 17% of all corporate board seats were filled by women. The goal of the law is to increase that number and eliminate the discrimination some believe is present due to the “old boy’s” network.

The law, SB826, requires all publicly traded companies in California to have at least one woman on the board of directors. If the board has five directors, then it needs to have at least two women. For boards with six people, half of the board members need to be women.

The law was implemented in 2018 and gave companies until 2019 to make those changes.

The penalties are significant for companies that don’t comply, starting at $100,000 for a violation. So far, no companies have been fined, even though around half of the companies that fall under the law’s reach haven’t complied. Now, the law is being challenged to determine if it should stand. The nonjury trial should have results within the next week. 

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