Quotas are unconstitutional, inherently inequitable

At work, white people are being told to check their privilege at the door. But a court ruling last week indicates there’s still hope for fair treatment in the corporate world.

On April 1, a California court struck down a state law mandating that corporate boards seats be reserved for people of minority groups. The court said quotas violated the state’s constitutional guarantee that everyone is treated equally under the law.

Equal protection isn’t just for minority races. It’s everyone’s right.

Justice Thurgood Marshall, the first African American on the U.S. Supreme Court, wrote in 1976 in McDonald v. Santa Fe Trail Transportation Co. that discriminating against white employees in favor of nonwhite employees is just as wrong and contrary to the Constitution as the reverse. That’s still the law today.

In 2020, California passed a law requiring public companies headquartered in the state to have at least one board member who is a racial minority or LGBTQ+ by the end of 2021, and increase that to two or more “diverse” board members by the end of 2022.

The law was challenged by Judicial Watch, a nonprofit constitutional advocacy group. Judicial Watch is also challenging another

California law enacted in 2018 mandating that all public companies reserve nearly half their seats for women. That trial is going on now.

Both lawsuits have attracted national attention because several other states are considering quotas.

In August 2021, the Security and Exchange Commission approved a rule that Nasdaq-listed companies must have at least one female board member and another who identifies as an “underrepresented minority” or LGBTQ+ or explain in writing why they have failed to meet that goal. Judicial Watch and other advocacy groups are challenging the Nasdaq rule in federal court.

The diversity warriors appear willing to trample constitutional rights and ignore the impact on nonminority people — especially white men. As if a worthy goal justifies any means.

When California lawmakers debated the minority quota bill in 2020, they were warned about its unconstitutionality but rammed it through anyway.

Gov. Gavin Newsom defended the minority quota bill, saying, “When we talk about racial justice, we talk about empowerment, we talk about power, and we need to talk about seats at the table.” That’s a rationale for ensuring city councils, state legislatures and other bodies reflect the population.

But a corporate board’s primary job isn’t to divvy up the spoils. It’s to run a company on behalf of shareholders — ensuring cash is managed, the balance sheet remains strong and products are marketed effectively. True, a company has some responsibility to the community, but not as a representative body.

Corporate boards need diversity of skills and experience. The average board chooses one new member a year, at most. Quotas will force them to prioritize race, gender and sexual preference ahead of merit.

The California ruling is important beyond corporate board selection. In the aftermath of George Floyd’s death, major corporations pledged specific increases in the hiring and promotion of Black executives. Deliberately discriminating against white people to meet those targets violates federal civil rights law and the Constitution. It’s odious and divisive.

Quotas are a mistake. The boardroom door is swinging open without them. An impressive 72% of all new corporate directors at S&P 500 companies in 2021 were from underrepresented groups. Now, 11% of directors are Black, and 30% are women.

We can achieve inclusion without discriminatory quotas like the one slapped down in California.