Federal Court Rejects Challenge to Statute Requiring Women on Corporate Boards, Citing CWL Amicus Brief

California Women Lawyers helped score a victory for women trying to break glass ceilings last week, as a federal judge issued a ruling that relied on CWL’s amicus arguments supporting a state law that requires publicly held corporations to include women on their boards of directors.

U.S. District Judge John A. Mendez issued an order Dec. 27 denying a preliminary injunction against SB 826, the statute signed into law in 2018 that requires all publicly held corporations headquartered in California to have a minimum number of women on their boards of directors.

“[E]njoining this law at this early stage may deny highly qualified women who are eager and seeking to join corporate boards the opportunities provided by SB 826,” Judge Mendez wrote. “The legislature determined that the law was necessary because the glass ceiling had been bolted shut with metal, shutting out thousands of qualified women.”

CWL filed an amicus curiae brief Oct. 8 in the case, Meland v. Weber, which is pending in U.S. District Court for the Eastern District of California. Plaintiffs in the case challenge the constitutionality of SB 826 on the ground that it requires corporate shareholders to discriminate on the basis of sex when exercising their voting rights. The plaintiffs argued that the law could not withstand the “intermediate scrutiny” applied to classifications based on gender, while the state argued that SB 826 passes the test because it remedies past discrimination and advances diversity on public boards. The court held that a preliminary injunction was not warranted because the state established that SB 826 was substantially related to the important government interest in remedying past discrimination against women.

The court also noted that issuing a preliminary injunction would not serve the public interest because SB 826 is clearly working, quoting CWL’s amicus brief:

That the law is working is underscored by the California Women Lawyers’ amicus brief. … As the brief explains: “Governmental action such as SB 826 reduces the negative effect of networks on female board membership by forcing boards to look outside their networks to recruit female directors. And it is beginning to work. Two years after SB 826’s enactment, the early progress has been measurable, significant, and has increased at a much faster pace since SB 826 was passed. In 2016, just 208 corporate board seats were newly filled by women; by about 2020 that number grew to 739; and, in the first quarter of 2021, women filled 45% of public company board appointments in California. Indeed, before the legislation, 29% of California companies that would have been subject to the law ‘had all-male boards, [and] as of March 1, 2021, only 1.3% … have all male boards.’ … As such, enjoining a law that survives intermediate scrutiny and that the legislature has determined is necessary to effectuate much needed and long overdue cultural change does not serve the public interest.

“CWL is proud to support the State of California in advocating for Senate Bill 826, which is aimed at increasing gender diversity on the boards of California-based companies,” CWL president Ana M. Storey said. “While CWL often joins amicus briefs written by sister organizations in cases of importance to women, we thought it was particularly important here to file our own brief giving voice to California women – those who seek a seat at the table on these corporate boards, as well as those whose lives may be affected by the decisions made at those tables.”

Storey thanked San Diego-based appellate attorneys Johanna Schiavoni and Melanie Gold for donating their time and expertise to draft the amicus brief on behalf of CWL, and credited CWL’s amicus committee, chaired by CWL first vice president Jodi Cleesattle, for coordinating the effort.

“We wanted to provide the court added context for SB 826, to show the discriminatory structural barriers that lead to the exclusion of women from corporate boardrooms, and to show how the law is helping to remove those barriers,” Schiavoni said. “We were particularly gratified that the district court found our amicus brief helpful and cited it in its detailed opinion. We agree with the court’s finding that the law is working and is benefitting the public interest by ensuring that women have equal opportunities to serve in these vital business leadership roles on corporate boards.”