Closing arguments are scheduled to begin this morning at 10:00 a.m. (California) in the first trial of the constitutionality of California's female director quota law, SB 826. The trial began last December before Los Angeles Superior Court Judge Maureen Duffy-Lewis. Crest v. Weber, Cal. Super. Ct. Case No. 19STCV27561. See SB 826 requires all publicly held corporations headquartered in California to have at least one woman on their boards of directors, and, by the end of 2021, two women on boards of five directors, and three women on boards of six directors or more. Cal. Corp. Code §§ 301.3 & 2115.5.
When California's board gender quota bill, SB 826, was introduced four years ago in January of 2018, I raised several questions:
- Would such a requirement be constitutional?
- Can the requirement be constitutionally applied to foreign publicly held corporations?
- Will this bill be followed by other bills mandating board composition based on other elements of diversity such as race, sexual orientation, ethnicity, marital status, or age?
- What about California's new, third gender category (See California Law May Spur Rewriting of Gender Boilerplate)?
We may soon have an answer to the first question. However, that answer may not be final in light of possible appeals and a pending challenge in federal court (see this post). As far as I know, no lawsuit has yet presented my second question. My third question was answered by the enactment of AB 979, which was enacted in 2020 (See this post). As to my fourth question, the California has yet to mandate a non-binary quota for public company boards.
