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On the First Day of the Holidays, My Labor and Employment Attorney Gave to Me - A Partridge in a Pear Tree and SB 826

It's back! Hard to believe another year is coming to a close. It's even harder to believe that California has once again enacted a slew of employment laws  that go into effect in 2019. The Legislature certainly keeps California employers busy. In the spirit of the season, we are again using the "12 days of Christmas" song to blog about one California law a day and that law's impact on California employers. So, on the first day of Christmas, my Labor and Employment attorney gave to me—a partridge in a pear tree and SB 826.

SB 826 requires publicly held corporations with its principle office located in California to include at least one woman director on the corporation's Board of Directors by the end of 2019. It further provides that corporations with five or more directors must include at least 2 female board members, and corporations with six or more directors must include at least three female board members by the end of 2021. It certainly seems that SB 826 has roots in the #MeToo movement. As we know, 2018 was replete with news regarding harassment against women. SB 826's directive places more woman in leadership roles and has been viewed as one of the most controversial bills of 2018. One could argue corporations are being forced to add women to their boards regardless of whether they are the most qualified. However, one could also argue that SB 826 provides women an opportunity they may not have had due to harassment/discrimination issues.

There are many corporations who are already ahead of the game when it comes to women being on the Board of Directors. However, for those covered corporations, they will need to determine whether they need to add a woman to their Board in 2019 and/or whether they need to add additional women to their boards by the end of 2021. What written policies may need to be changed? What policies may need to be added? Will they increase the number of directors? Will there be term limits?  

There are many issues covered corporations will need to review and analyze in order to adhere to SB 826. It is recommended they begin sooner rather than later. Failure to adhere to SB 826 will result in an initial penalty of $100,000, which rises to $300,000 for subsequent violations.

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