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Home / News / Business / No corporations fined for noncompliance with California law requiring women on corporate boards

No corporations fined for noncompliance with California law requiring women on corporate boards

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A high-ranking member of the state Secretary of State’s Office has testified that no corporations have been fined for noncompliance since a law went into effect in 2018 requiring more women on corporate boards.

Elizabeth Bogart, chief of the business programs division of the Secretary of State’s Office, is in charge of implementing Senate Bill 826, which required every publicly held corporation headquartered in California to have at least one director “who self-identifies her gender as a woman” on its board of directors by Dec. 31, 2019.

The law also requires corporations to have up to three such persons on their boards by Dec. 31 of this year, depending on the board’s size.

Bogart’s testimony on Thursday came during the second day of a nonjury trial before Los Angeles Superior Court Judge Maureen Duffy-Lewis of a taxpayer lawsuit challenging the law’s constitutionality. The conservative judicial watchdog group Judicial Watch filed the lawsuit in August 2019 on behalf of plaintiffs Robin Crest, Earl De Vries and Judy De Vries, all of whom sat in the front row of the audience Thursday to watch the proceedings.

Judicial Watch argues that California’s quotas for women on corporate boards violates the California constitution’s equal protection and asks the court to permanently enjoin any expenditure of taxpayer funds to implement the quotas.

In their court papers, lawyers for the Attorney General’s Office argue that the plaintiffs cannot show that any illegal or wasteful expenditures of taxpayer money has occurred in the implementation of the law’s requirements. They also maintain that the law addresses longstanding discrimination against women in the “secretive process of corporate board director selection on publicly held corporations in California and attains the benefits of gender diversity for the public and the economy.”

SB 826 also does not violate California’s equal protection clause, lawyers for the Attorney General’s Office further argue in their court papers.

The Secretary of State may impose fines for violations of the law.

When he signed SB 826 into law in 2018, then-Gov. Jerry Brown noted that there have been “numerous objections to this bill and serious legal concerns that have been raised,” adding that he would not “minimize the potential flaws that indeed may prove fatal to its ultimate implementation.”

Former state Sen. Hannah-Beth Jackson, who co-authored SB 826, previously said that it is “disappointing that this conservative right wing group is more invested in spending thousands of dollars on a questionable lawsuit than supporting policy that improves business’ profits and boosts our economy.”

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