California law that would create corporate gender quotas is a textbook case of government overreach

Forcing companies to accept a token woman could have unintended consequences.
Image: Jerry Brown
Gov. Jerry Brown stops by the Senate Chambers to make a few remarks shortly before midnight on Aug. 31, 2018, in Sacramento, California.Rich Pedroncelli / AP
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Private companies across the country must do better to combat gender discrimination and achieve gender diversity. But governments must resist the urge to mandate gender quotas. Unfortunately, that is just what the lawmakers of California have done. On Aug. 30, California lawmakers voted to force publicly traded companies based in California to have at least one woman on their boards by 2019 and depending on the size of the company, one to three women by 2021.

California Senate Bill 826, sponsored by California State Senator Hannah-Beth Jackson (D), now heads to the desk of Gov. Jerry Brown. If it becomes law, this will be the first example of a state-mandated gender quota of its kind in the U.S. I hope he doesn’t sign it.

Quotas are designed to tackle the systemic and structural reasons that make it difficult to obtain equality. For instance, women still do the lion’s share of household work and childcare. It is hard to rise through the ranks of the political, business, or legal world when you are literally doing two full-time jobs every day.

Once the government decides it has the right to intercede in this arena, it is difficult to know where and when the government interference will end.

But forcing companies to accept a token woman could have unintended consequences. For one thing, women who are newly added to all-male boards may wonder if they are being asked to join because the state forced the company to do so. The larger policy problem, however, is that government overreach like this tends to have no limiting principle. Once the government decides it has the right to intercede in this arena, it is difficult to know where and when the government interference will end. What, for instance, is to prevent the government from requiring that each year, private employers hire employees from any number of classifications based on age, race, sexual orientation, or gender identity? Diversity is a vitally important goal, but one that the government should not mandate.

There are also a number of legal issues created by the bill. For instance, the bill specifically creates a classification based on gender, and therefore it raises questions of equal protection under both the U.S. Constitution and the California Constitution. When the government legislates on the basis of gender, courts typically subject that legislation to a heightened scrutiny. This basically means the government has to prove it has a really good reason for doing what it is doing, and that there isn’t a better way of accomplishing that goal.

Bill proponents should be concerned. The California Assembly Committee on Judiciary found that “[t]o defend the constitutionality of this bill, it would not appear to be enough to simply cite statistics showing that women are grossly underrepresented on corporate boards.” This does not mean that the bill is certain to be overturned in a court. But it does mean there is a good chance that it might.

The bill specifically creates a classification based on gender, and therefore it raises questions of equal protection under both the U.S. Constitution and the California Constitution.

For all of its issues, California’s proposed law is at least attempting to address a real problem. We are nowhere near achieving gender equality. The California Assembly relied on research from the Center for American Progress which found that “the United States ranks first in women’s educational attainment on the World Economic Forum’s 2016 Global Gender Gap Index of 144 countries. But it ranks 26th in women’s economic participation and opportunity and 73rd in women’s political empowerment.”

Just over 22 percent of Fortune 500 company board seats are filled by women. In California, just over 15 percent of publicly traded corporation board seats are filled by women. While almost half of summer associates in law firms are women, less than 20 percent of all law firm equity partners are women. In reality, at least half of the members of board of directors of companies should be women, if for no other reason than that we know that gender diversity leads to better policy outcomes.

In the political arena, women are also a far cry from gaining parity. This year, just over 25 percent of state legislators and only 12 percent of governors are women. The numbers are not much better on the federal level. Only 23 percent of U.S. senators are women. Less than 20 percent of members of Congress are women.

Ask any woman in the workplace if they have been treated differently (by which I mean worse) than a male counterpart and almost all of us will say we have.

Gender diversity also helps decrease workplace bias. Research from Pew shows that “women in majority-male workplaces report higher rates of gender discrimination.” Ask any woman in the workplace if they have been treated differently (by which I mean worse) than a male counterpart and almost all of us will say we have. This doesn’t mean, thank goodness, that we have all been the victims of sexual assault or sexual harassment. It means the vast majority of us have been treated as less than because we are women.

Justice Ruth Bader Ginsburg famously said, “There will be enough women on the Supreme Court when there are nine,” meaning when all of the members of the court are women. I agree.

I am a feminist, by which I mean I am in favor of gender equality. I also believe that women deserve equality in every arena — socially, economically, politically and personally. It is better for women. It is better for men. And yet, I still believe the solution to this ongoing problem cannot be a state-mandated quota.

It’s also not clear that quotas ultimately help diversity. Take the example of Norway. The Scandinavian country has a gender quota for businesses and this has indeed increased the rate of women in senior positions. But, as Alice Lee of the New Republic noted: “It also caused what’s been dubbed the ‘golden skirt’ phenomenon: Certain women hold multiple board positions, meaning that while more board positions are held by women, not as many new women are entering the board room as hoped. And, even now, Norway has fewer women CEOs than the United States.”

Governments can certainly help to foster and incentivize an environment in which companies choose to make positive changes. But when a state mandates gender quotas on private boards, it is going too far.

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