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Court blocks California law to put more women on corporate boards

·2 min read

By Daniel Trotta

May 16 (Reuters) - A California judge has blocked a landmark law that sought to add more women to corporate boards as unconstitutional, finding the state failed to show there was intentional discrimination keeping women out of the boardroom.

Los Angeles County Superior Court Judge Maureen Duffy-Lewis imposed an injunction against Senate Bill 826, which former Governor Jerry Brown signed into law in 2018 at the height of the #MeToo movement exposing harassment and abuse against women in the workplace.

The law requires publicly traded companies based in California to appoint at least two women to boards of up to five seats and three women to boards of six seats or more. That resulted in doubling the percentage of women to hold board seats in California, according to promoters of the law.

But the judge found the state failed to show that SB 826 was necessary nor that it was narrowly tailored to halt discrimination, saying existing law required California to show strong evidence that remedial action was necessary.

"Generalized assertions of discrimination in a particular region or industry are insufficient to give rise to a compelling governmental interest, as are mere statistical anomalies, and the discrimination must be identified with specificity," the judge said, finding SB 826 violated the equal protection clause of the state constitution.

The ruling was dated Friday but did not become widely known until Monday.

The suit challenging the law had been brought by the conservative legal advocacy group Judicial Watch, which did not immediately respond to a request for comment.

Betsy Berkhemer-Credaire, chief executive of the non-profit group 50/50 Women on Boards, one of the leading backers of the bill, urged the state of California to appeal.

The office of the secretary of state, which is named as the defendant, said in a statement on Monday its legal counsel was still reviewing the verdict.

"It's way off base," Berkhemer-Credaire said of the ruling. "The testimony we gave in a 10-week trial proved without a doubt that women have been discriminated against, and we proved the business case for having women on boards."

When the law was passed, women held 16% of the board seats on more than 500 California companies listed on the Russell 3000 Index, but that number has since grown to 32%, according to 50/50 Women on Boards. (Reporting by Daniel Trotta Editing by Chris Reese)

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