NASDAQ Strikes a Blow For Discrimination

Today NASDAQ filed proposed rules with the Securities and Exchange Commission that would “mandate diversity in the boardroom for companies listed on its stock exchange.”

[T]he new rules would require companies on the stock exchange to have at least one woman director and one who self-identifies as an “underrepresented minority” or member of the LGBTQ community — or face possible delisting.

NASDAQ’s president provided the usual spin:

Nelson Griggs, the president of Nasdaq Stock Exchange, added that the proposal “gives companies an opportunity to make progress toward increasing representation of women, underrepresented minorities and the LGBTQ+ community on their boards.”

Of course, the proposed rule would not provide an “opportunity,” which obviously exists already, but rather would represent a dictatorial order. Delisting would be devastating to most companies that trade on NASDAQ. Nevertheless, I assume that an SEC under Democratic control would approve these discriminatory rules.

The purpose of a board of directors is to manage a corporation for the benefit of its shareholders. It is not to advance a collateral liberal agenda, which is what NASDAQ no doubt has in mind. It is noteworthy that the American Civil Liberties Union, which once advocated for civil rights but now is on the other side, applauded NASDAQ’s crudely discriminatory initiative.

Unmentioned in liberal media accounts hailing NASDAQ’s proposed discrimination is the fact that it would be illegal. Hans Bader pours cold water on the liberal parade:

The stock exchange NASDAQ plans to impose racial quotas on companies that are listed on it, requiring them to violate federal law. Under a proposed NASDAQ rule, corporations would have to put at least one minority and one woman on their board of directors. Such racial quotas violate a federal statute, 42 U.S.C. 1981, which forbids racial discrimination in contracts, and which has been interpreted by the Supreme Court as forbidding racial quotas even when such quotas are motivated by a desire for diversity.
***
[R]acial quotas are forbidden as a means of pursuing diversity, even in the unusual contexts where an applicant’s race can be considered to promote diversity. That’s what the Supreme Court ruled when it struck down a racial quota in college admissions. It ruled that violated both the Constitution and 42 U.S.C. 1981, which bans racial discrimination in public and private contracts. (See Gratz v. Bollinger, 539 U.S. 244, 276 n.23 (2003)).

Moreover, corporate boards are not an area where diversity justifies the use of race at all. Most courts say that in employment, as opposed to college admissions, diversity is not a reason to consider an applicant’s race. An appeals court struck down a federal diversity regulation imposed on broadcasters for that reason, finding it unconstitutional. (See Lutheran Church–Missouri Synod v. FCC (1998)).

Another appeals court ruled it violated Title VII of the Civil Rights Act to make layoff decisions based on race in order to maintain “diversity.” (See Taxman v. Board of Education (1996)).

Much more at the link. Liberals have a political agenda that lets nothing stand in its way–certainly not the Constitution. Liberals are essentially lawless. Happily, we now have a Supreme Court, and more broadly a federal judiciary, that likely will stand up against these unconstitutional attempts at racial or gender discrimination. This is one of many reasons why we should be grateful that for four years at least, Donald Trump has been our president.

Responses