July 27, 2021

Federal Court of Appeals says ‘yes’ to challenge of California rule mandating female board members

A California court approved on Monday a state law that requires publicly traded companies in the state to include at least one woman on their board.

The Ninth U.S. Circuit Court of Appeals reversed a district court dismissal allowing the case to proceed, according to the Wall Street Journal.

Creighton Meland, Jr. sued the state alongside Pacific Legal Foundation, saying state law “requires shareholders to discriminate on the basis of sex when exercising their corporate voting rights, in violation of the Fourteenth Amendment.”

“The law is not only unconstitutional; it’s patronizing,” an attorney for the Pacific Legal Foundation said in a statement, according to the report.

“It perpetuates the myth that women cannot make it to the boardroom without government help and are only making it there due to government’s help,” it added.

California is the first state to include the requirement of a female board member. The bill was first introduced in 2018.

According to the Daily Caller, companies that violate the law “could be responsible for a $100,000 fine and for a second or subsequent violation, a $300,000 fine.”

Though well intended, the law opens the door to other board requirements that many see as government overreach. The battle is not about the need to involve women, but over the ability of a company to choose its own leadership.

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