July 29, 2020
By Christina Sandefur
Under California’s recently enacted SB 826, all publicly traded companies incorporated or even just headquartered in California are required to have at least one female board member, and that quota increases depending on the board’s size. Corporations that violate the quota face hundreds of thousands of dollars in fines and will be publicly chastened on the Secretary of State’s list of non-compliant corporations.
Our friends at the Pacific Legal Foundation filed a lawsuit challenging this discriminatory quota on behalf of shareholders who are forced by law to take a candidate’s sex into account every time they vote for board members. This week, we filed an amicus brief in support of the lawsuit, pointing out that not only does California’s new law unconstitutionally force people to make decisions on the basis of sex, but it also creates a patronizing quota system that harms the women it purports to help.
Time and time again, male-dominated governments (like the California legislature) have condescendingly replaced individual women’s decisions with one-size-fits-all standards. Back in the early 20th century, states imposed minimum wage laws on women workers, purporting to benefit women by ensuring higher pay. But rather than giving women greater opportunities, those laws put many of them out of work altogether. More recently, a Harvard Business Review study showed a law in Denmark aimed at reducing the gender “pay gap” actually incentivized businesses to move away from performance-based pay, meaning individual women were less likely to be rewarded for good work. And government-mandated paid leave laws—intended to help new mothers—have been shown to exacerbate gender inequality. As the Cato Institute’s Vanessa Brown Calder notes, “Being passed over for a job, involuntarily mommy-tracked, or having wages slashed to pay for prospective benefits can have impacts that last a professional lifetime.”
Top-down, gender-based mandates and quotas can be cost prohibitive for businesses, resulting in shuttered companies and layoffs that ultimately leave women unemployed. Even Planned Parenthood, an organization “founded on the revolutionary idea that women should have the information and care they need to live strong, healthy lives and fulfill their dreams,” doesn’t provide paid maternity leave at most of its offices, for fear that the costs would force the nonprofit to close clinics, which would affect both women clients and employees.
There are reasons women may not have parity on corporate boards that have nothing to do with institutional discrimination, but are based on individual preferences. Studies show that, on the whole, men place a high premium on a larger paycheck, while women value flexibility at work more. Thus, the number of women-owned businesses has increased 3000% since 1972, and women are increasingly choosing to work in the “gig” economy.
But laws like California’s SB 826 treat women as incapable of choosing their professions or negotiating the terms of their employment—and as victims if they choose flexibility or other benefits over jobs with more traditional hours or responsibilities, or higher pay. As Justice Ruth Bader Ginsburg once noted, laws aimed at “helping” women frequently result in depriving them of their freedom of choice. Based “on the notion that women could not cope with the world beyond hearth and home without a father, husband, or big brother to guide them,” she wrote, “the state impeded both men and women from pursuit of the very opportunities and styles of life that could enable them to break away from traditional patterns and develop their full, human capacities.”
That’s why the rationales behind SB 826 have historically been rejected by egalitarian feminist groups. The National Woman’s Party, original champion of the Equal Rights Amendment, wholeheartedly rejected so-called protective legislation that actually singled women out for what they considered to be restrictive and discriminatory treatment. At that time, California law prohibited businesses from employing women over 8 hours a day or 48 hours a week, or hiring women for jobs that required them to carry objects weighing 10 pounds or more up stairways rising more than 5 feet—supposedly to “protect” them. Those laws, NWP argued, were actually “used to deny women the right to earn their own livelihoods and to support their dependents.” Today, SB 826 similarly ignores the preferences of women to pursue the career paths of their choice, supplanting those decisions with the economic choices that bureaucrats think women should make.
Rather than regarding women as capable individuals with their own preferences and priorities, SB 826 patronizes them by subordinating them to government’s one-size-fits-all standard of success. And it conscripts corporations and their shareholders into that discriminatory system, perpetuating harmful stereotypes about women’s inability to earn or fill certain roles by merit. We hope the courts will safeguard shareholders’ right to vote on the basis of merit—and to not be forced by law to cast their vote on the basis of sex.
Christina Sandefur is the Executive Vice President at the Goldwater Institute.