Andrew cuomo
Judge Tosses California Law Mandating Diversity on -
Stop scratching on holidays
Published: June 1, 2012
Off Track Betting in New York State has been racing into a crisis called shrinking revenue. Some people have spitballed a solution: Don’t close on holidays.
New York State Racing Law bars racing on Christmas, Easter and Palm Sunday, and the state has ruled OTBs can’t handle action on those days, even though they could easily broadcast races from out of state.
“You should be able to bet whenever you want,” said Jackson Leeds, a Nassau OTB employee who makes an occasional bet. He added some irrefutable logic: “How is the business going to make money if you’re not open to take people’s bets?”
Elias Tsekerides, president of the Federation of Hellenic Societies of Greater New York, said OTB is open on Greek Orthodox Easter and Palm Sunday.
“I don’t want discrimination,” Tsekerides said. “They close for the Catholics, but open for the Greek Orthodox? It’s either open for all or not open.”
OTB officials have said they lose millions by closing on Palm Sunday alone, with tracks such as Gulfstream, Santa Anita, Turf Paradise and Hawthorne running.
One option: OTBs could just stay open and face the consequences. New York City OTB did just that back in 2003. The handle was about $1.5 million – and OTB was fined $5,000.
Easy money.
Law requires public companies in the state to have at least one board member from underrepresented groups
A Los Angeles County Superior Court judge granted a summary judgment in favor of a lawsuit challenging the California law as unconstitutional.
PHOTO: KEITH BIRMINGHAM/ZUMA PRESS
A judge struck down a California law that requires public companies based in the state to have at least one board director from underrepresented groups, a setback to efforts to mandate board diversity.
Judge Terry Green of the Superior Court of California in Los Angeles County granted on Friday a summary judgment in favor of a lawsuit challenging the law as unconstitutional. Judge Green said the law improperly mandated heterogeneous boards and must protect the right of individuals to equal treatment.
The law, enacted in 2020, required the boards of publicly traded companies based in the state to have at least one racially, ethnically or otherwise diverse director by 2021.
A lawsuit backed by Judicial Watch, a conservative foundation, said the law, known as Assembly Bill 979, violated the equal protection clause of the state’s constitution.
The board-diversity quota was the first of its kind in the U.S. and followed a similar California measure enacted in 2018 that mandated female directors on all boards of the state’s public companies. That measure is also facing legal challenges in state and federal courts.
Under the board-diversity law, individuals who identify as Black, African-American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian or Alaska Native, or who identify as gay, lesbian, bisexual or transgender, would be considered eligible for meeting the requirement.
In a statement following the judge’s decision, Judicial Watch President Tom Fitton applauded the court for upholding “the core American value of equal protection under the law.”
It wasn’t clear if the defendant in the case, the California Secretary of State’s office, would appeal the decision. The agency didn’t immediately respond to requests for comment.
The requirements are now on hold pending any potential appeals.
Esther Aguilera,
She added that her organization would continue its work on advancing Latino board membership, including reaching out directly to CEOs, board chairs and corporate secretaries.
The killing of George Floyd in police custody in 2020 and subsequent protests prompted pledges from U.S. business leaders to fight racism and increase diversity. Since then, some states, regulators and investors have pushed for greater diversity on corporate boards. Most of these efforts have called for more disclosure and stopped short of mandates or quotas. Many of the measures have faced legal challenges.
In August 2021, the Securities and Exchange Commission approved a Nasdaq Inc.
A Texas-based nonprofit has filed a federal lawsuit in the U.S. Court of Appeals for the Fifth Circuit, arguing that the SEC’s approval of Nasdaq’s rule violated the Equal Protection Clause of the U.S. Constitution and federal antidiscrimination laws.
Advocates of greater board diversity say that mandates or quotas are sometimes the only way to achieve meaningful progress in improving representation among key decision makers on corporate policy.
“There is an allergy in the United States to quotas, but when you look at the global view on diversification of corporate boards, there is an understanding that the only way boards end up being diversified is through mandates,” said Fabrice Houdart,
“Diverse groups tend to come to better decisions,” he added. “We’re convinced this is a question of good governance.”
When Assembly Bill 979 was enacted in 2020, more than 35% of California’s 513 public-company boards at the time—185 companies—wouldn’t have met the requirement when it was scheduled to go into effect in 2021, according to Equilar, a research firm that gathers data on executives and boards.
Recent research found that the law led to a significant increase in board seats held by people from underrepresented groups. The share of directors from such groups rose from 13.9% of board seats in 2019 to 22.6% in 2021, according to a paper co-authored by Daniel Greene, a finance professor at Clemson University. Those figures probably undercount the percentage of board members who qualify under AB 979 because firms don’t always disclose the race or ethnicity, let alone the sexual orientation or gender identity, of their board members, Dr. Greene said.
The researchers also found that the share of companies with at least one underrepresented director jumped from 57% to 90% from 2019 to 2021, underscoring the impact of mandates like California’s. “If we’re waiting for firms to do this voluntarily, it’s probably not going to happen in terms of hitting these same milestones,” Dr. Greene said.
The California rule called for increased requirements on companies starting in 2022, mandating that corporate boards with four or more members would have to include two people from underrepresented groups; boards with at least nine directors would have to include a minimum of three diverse directors.
Corrections & Amplifications
Judge Terry Green said a California board-diversity law improperly mandated heterogeneous boards and must protect the right of individuals to equal treatment. An earlier version of this article incorrectly said that he didn’t explain the reasoning behind his order striking down the law. (Corrected on April 5)
Write to Lauren Weber at lauren.weber+1@wsj.com
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