Efficient And Effective Business Litigation

Court overturns corporate board diversity law

On Behalf of | May 4, 2022 | Employment Law |

California strives to be ahead of the curve in ensuring there is fairness in the workplace. This is true for white collar corporate jobs and blue collar hourly workers alike. In recent years, many changes have been initiated to promote diversity. Although this is undeniably positive, it can impact how companies go about their business and potentially cause them problems.

A recent court decision provides an example of some of the challenges corporations must navigate.

Law overturned

California’s Assembly Bill 979 made it a requirement for companies that are publicly traded and have an office in California to have a minimum of one member of “underrepresented” communities on their boards. It was passed in 2020 and became a requirement by the end of 2021. Companies either needed to place a person from the Black, Asian, Latino, Native American, LGBT or Pacific Islander communities on the board to fill an open seat or create a new seat for the person.

However, a Los Angeles judge declared that the law is unconstitutional. According to the group that sought an injunction against the law, it is a violation of the U.S. Constitution’s Equal Protection Clause. The same group had also filed a lawsuit about a law that required a female member on corporate boards.

Employers should know how to defend against employment law claims

These issues are frequently viewed from the employee’s perspective, but employers also have rights. With this recent decision, employers should be cognizant of how it might alter the way they run their company.

It is also useful to know these laws when there are accusations of discrimination, harassment, retaliation and other employment law violations. Forging a defense is crucial to avoid the financial ramifications. These cases can also damage a company’s standing within the community and harm its overall business operations. Consulting with experienced people who provide high-caliber services in employment defense can be essential.