An Overview of California’s New Harassment Laws
There is no doubt that the #MeToo movement has had a profound effect on American culture. While there is still much work to be done to properly address the many reported and unreported instances of sexual harassment and sexual violence in and out of the workplace, states like California are taking the lead by passing new laws meant to address some of the consequences and effects (intended and unintended) of sexually-motivated harassment, assault, and discrimination. Enter California’s Senate Bill (SB) 826.
Dramatic Changes May Be Required Under SB 826
Senate Bill 826 took effect on January 1, 2019, and now publicly-traded companies whose “principal executive office” is in the State of Kansas will have to have at least one female director on their board of directors by December 31, 2019. Within two years – by the end of 2021 – boards of directors comprised of five members must have at least two women directors, and larger boards of directors must have at least three women directors.
How pervasive of a problem is the lack of diversity on corporate boards in California? According to the San Francisco Chronicle, which quoted a study conducted by the research and consulting firm Equilar, of the 457 companies potentially impacted by SB 826, 94 had no female directors and an additional 161 companies only had one female director. In other words, nearly half of all companies who could be affected by SB 826 were in compliance with the law’s demands as of September 30, 2018.
What About Boards That are Full and Do Not Have Room?
Some affected companies may attempt to skirt SB 826’s requirement that one or more female directors be added to their boards by claiming that there are no vacancies on their board. For those companies that might claim such an issue, SB 826 has an answer: “Change the number of directors on your board.” That is to say, companies that must comply with SB 826 must make any changes to their bylaws or governing documents that may be necessary so that the company can comply with the law’s demands.
What SB 826 Tells Us About Harassment and Diversity in California Business
The requirements of SB 826 come at a time when America is becoming increasingly aware that women have been kept away from and out of positions of power in government as well as in private industries and institutions. Whether such exclusion was purposeful or unintentional, the result was the same: women were prevented from experiencing the same career growth, promotions and progression as their male counterparts. Not only this, but an exclusion of female voices from corporate boards of directors prevented women from offering their insights and experiences so as to improve the treatment of women within these organizations.
Contact Heit Law Group, P.C. for Assistance with SB 826
If you are concerned about SB 826 or any of the other similar laws that went into force on January 1, 2019, reach out to the Heit Law Group, P.C. by calling (310) 744-5227 or going to https://heitlawgroup.com.