Yesterday, the Alliance for Fair Board Recruitment, a nonprofit membership organization headquartered in Austin, Texas, filed a federal lawsuit challenging the constitutionality of California statutes SB 826 and AB 979— recently enacted laws that require all publicly traded California-based corporations to implement sex and race quotas for board members. The complaint is attached: Case 2:21-cv-05644.
In 2018 and 2020, California enacted two laws—SB 826 and AB 979—that require all publicly traded corporations headquartered in California to discriminate based on sex and race in selecting their board members.
The 2018 statute, SB 826, requires corporations headquartered in California to have specific numbers of women on their boards, depending on how many seats the board has. The 2020 statute, AB 979, similarly requires these companies to set aside a specific number of director seats for members of “underrepresented communit[ies],” which it defines as those who self-identify as “Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian,  Alaska Native, . . . gay, lesbian, bisexual, or transgender.”
As noted in the complaint, both of these laws are an exercise in unconstitutional and patronizing social engineering. The legal regime they institute relies on and perpetuates invidious racial categories and sex stereotypes that the American legal system has rightly discarded. These statutes not do not claim to remedy any particular past discrimination. Rather, California says that mandating race and sex discrimination is justifies because it thinks imposing these quotas will be lucrative for California’s corporations and shareholders and thus for the state.
If the Fourteenth Amendment and our foundational civil rights laws stand for anything, it is that money is no justification for race or sex discrimination.
The members of the Alliance for Fair Board Recruitment include biological males who do not self-identify as women or underrepresented minorities as defined in AB 979 and are actively seeking corporate director positions. Because of California’s laws, they are unable to compete on an equal footing for positions on the boards of directors of corporations headquartered in California, in violation of the Fourteenth Amendment and 42 U.S.C. § 1981. Other members of the Alliance are stockholders in publicly traded companies headquartered in California who object to being required to illegally discriminate on the basis of race and sex in nominating and selecting board candidates.
Edward Blum, president of the Alliance for Fair Board Recruitment, said, “California’s sex and race quotas for corporate board membership are indisputably violations of our nation’s civil rights laws and the U.S. Constitution. It is our hope the courts end these unfair and unlawful practices immediately.”
Alliance for Fair Board Recruitment
Contact: Edward Blum, President