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California law requiring women on company boards struck down as unconstitutional

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A state court judge found California’s law requiring publicly held companies to include women on their boards unconstitutional, dealing another blow to the state’s push to diversify corporate leadership.

Los Angeles Superior Court Judge Maureen Duffy-Lewis issued the decision on Friday in favor of California taxpayers who sought to block enforcement of the law, said the bill’s author, former California State Senator Hannah-Beth Jackson.

Jackson said she believes the state will appeal the verdict and prevail.

The ruling was not available on the court’s website on Monday afternoon.

Three taxpayers challenged the law in 2019, saying it amounted to sex discrimination in violation of the state’s constitution.

California’s secretary of state had defended the law at trial, arguing that the state has a compelling interest in gender diversity on boards and that the law was tailored to address a historic lack of women on boards.

Spokespeople for the secretary of state and for Judicial Watch, which represents the plaintiffs, did not immediately reply to requests for comment.

Passed in 2018, the statute required publicly held companies based in California to have up to three women directors, and allowed the secretary of state to issue fines of up to $300,000 per violation. No fines have been levied.

Judicial Watch recently won another taxpayer challenge to a similar California law requiring boards to include directors who self-identify as a member of an “underrepresented community,” which includes Asian, Black, Latino, Native American, and Pacific Islander individuals, as well as those who are gay, lesbian, bisexual or transgender.

(Reporting by Jody Godoy in Santa Ana, California; Editing by Noeleen Walder and Jonathan Oatis)

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SourceReuters

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