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Volume X, Number 269

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Will This Proposed Law Discriminate Against Minority Males And Non-Binary Persons?

In 2018, California enacted legislation, SB 826 (Jackson), mandating that publicly held corporations with their principal executive offices in California have a minimum number of female directors.  See California Enacts Novel Female Board Quota Legislation.  The legislature is now considering legislation that would mandate similar quotas with respect to directors from underrepresented communities.  The bill, AB 979 (Holden) defines a "director from an underrepresented community" an individual who self-identifies as "Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native".

Although the bill appears to be neutral as to the sex of a director, it will likely have the effect of discriminating against minority males.  If enacted, publicly held corporations will be required to comply with both SB 826 and SB 979.  Therefore, individuals who self-identify as both female and from an "underrepresented community" will likely be preferred because they would satisfy both quotas.  The easily predictable result of SB 979 would be a decrease in the over-all number of directors on publicly held company boards who self-identify as male or non-binary and as being from an underrepresented community.

As has been discussed previously in this blog, there are two pending legal challenges to the constitutionality of SB 826.  See Secretary Of State Must Answer Legal Challenge To Female Director Quota Law.   If SB 979 is enacted, it would likely face similar challenges. 

© 2010-2020 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume X, Number 226


About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm

Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients...