California Passes Law Requiring Boards of Publicly-Held Corporations to Include Women by 2019 (SB 826)

woman on boardOn September 30, 2018, California Governor Jerry Brown signed into law a radical initiative to add women to corporate boards of directors for publicly-held corporations headquartered in California.   According to Brown in a letter to the California State Senate, “Given all the special privileges that corporations have enjoyed for so long, it’s high time corporate boards include the people who constitute more than half the ‘persons’ in America.”  The California Senate approved Senate Bill 826 by a vote of 23 to 9 after the State Assembly narrowly passed the proposal with the bare minimum 41 votes a day earlier.  The Bill was then approved by the Governor and filed with the California Secretary of State.

Brown lawIn an effort to “close the gender gap” in business, the new law requires publicly traded corporations whose principal executive offices are headquartered in California to include at least one woman on their boards of directors by the end of 2019.  By December 31, 2021, this requirement will expand to require that a minimum of two women must sit on boards with five (5) members, and there must be at least three women on boards with six or more (6+) members.  The corporations’ SEC 10-K form will be used to determine the location of the principal executive offices.

The bill requires that by July 1, 2019, the Secretary of State publish the number of domestic and foreign corporations whose principal executive offices are located in California and who have at least one female director. The bill also authorizes the Secretary of State to impose fines for violations of the bill, and provides that funds from these fines are to be available, upon appropriation, to offset the cost of administering the bill.

Penalties for non-compliance will be high, including fines of $100,000 for a first violation and $300,000 for a second or subsequent violation.  Companies must demonstrate their compliance by filing their board member information with the Secretary of State by the respective deadlines. Continue reading

Employers May Only Recover Attorney’s Fees and Costs in Certain Actions If They Can Demonstrate that the Plaintiff Brought the Action in Bad Faith (SB 462)

Employers May Only Recover Attorney's Fees and Costs in Certain Actions if They Can Show the Employee Acted in Bad Faith

Employers May Only Recover Attorney’s Fees and Costs in Certain Actions if They Can Show the Employee Acted in Bad Faith

by Jennifer A. Grady, Esq.

After January 1, 2014, employers will only be able to recover reasonable attorney’s fees and costs if they are the prevailing party in a court action brought by current or former employees for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions if  they can demonstrate that the employee brought the action in bad faith.  In order to make this recovery, either party must have requested attorney’s fees and costs at the initiation of the action.

Senate Bill 462, which amends Labor Code § 218.5, does not permit employers to recover attorney’s fees and costs on cases for failure to pay minimum wage or overtime.  In such cases, California Labor Code § 1194(a) provides that in a civil action, an employee, but not the employer, is entitled to recover the unpaid balance of the full amount of the unpaid minimum wage or overtime compensation, including interest thereon, reasonable attorney’s fees, and costs of suit.

Senate Bill 462 was signed into law by California Governor Jerry Brown on August 26, 2013.  The new provisions of this law will take effect on January 1, 2014. Continue reading