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California sued again for requiring women on company boards

SACRAMENTO, Calif. (AP) — California’s first-in-the-nation law requiring publicly held companies to put women on their boards of directors is facing a second legal challenge.

The law requires publicly traded companies to have at least one woman on their boards by the end of this year. By 2021, boards with five members must have two women, while those with six directors must have three.

The Pacific Legal Foundation provided The Associated Press with the lawsuit it filed in federal court Wednesday, arguing that the law violates the equal protection clause of the U.S. Constitution.

The libertarian group wants to block such laws in California and other states. Similar proposals have been introduced in Illinois, Massachusetts, New Jersey and Washington state, the group said.

Illinois ultimately enacted a pared-down law this year requiring publicly traded companies to report the demographics of their boards and plans for promoting diversity to the state each year.

Some European countries, including Norway and France, already require corporate boards to include women.

“The law mandates exactly what the equal protection clause forbids — taking into account things like sex or race,” foundation attorney Anastasia Boden said. “The Constitution is meant to ensure that people are free to be individuals. Here, the law assumes that people of the same sex are essentially interchangeable.”

Another conservative group, Judicial Watch, sued in August, arguing that spending taxpayer money to enforce the law would violate the California Constitution.

Secretary of State Alex Padilla is named in both lawsuits. He’s asking a judge to throw out the Judicial Watch lawsuit, saying taxpayers have not been harmed and thus have no standing to sue.

Companies face $100,000 fines if they fail to report their board compositions to Padilla’s office. Those who fail to include the required number of female board members can be fined $100,000 for a first violation and $300,000 for subsequent violations.

Former Gov. Jerry Brown signed the measure into law last year as lawmakers reacted to the national #MeToo movement against sexual misconduct. The Democratic governor said at the time that the legislation had “potential flaws” that could block its implementation but that it was important to send a message.

State Sen. Hannah-Beth Jackson said her bill is already having a positive effect but respects the right of anyone to file a challenge.

“I strongly believe — and significant research has shown — that this is a policy that improves a business’ performance and their bottom line,” Jackson said in a statement, noting that many companies have already voluntarily complied.