As we start April 2022, here are five new California employment law developments that California employers need to know about:
1. Court rules California’s law requiring corporate board diversity is unconstitutional.
California passed AB 979 which enacted Corporations Code section 301.4 in 2020. The law requires corporations with their principal executive offices located in California to have set number of board members from an “underrepresented community” on its board by the end of 2021. The law sets forth that a “’Director from an underrepresented community’ means an individual who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender.”
The court ruled that:
Corporations Code § 301.4 violates the Equal Protection Clause of the California Constitution on its face. The statute treats similarly situated individuals – qualified potential corporate board members – differently based on their membership (or lack thereof) in certain listed racial, sexual orientation, and gender identity groups. It requires that a certain specific number of board seats be reserved for members of the groups on the list – and necessarily excludes members of other groups from those seats.
The court’s opinion in Crest v. Padilla can be read here.
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