Board diversity lawsuit filed in Idaho by a new plaintiff’s firm
– Lawsuits filed in California alleging boards didn’t diversify the way they said they would have trailed off, mostly due to new California law that requires more diversity.
– But a lawsuit has been filed in Idaho – and this time by a new law firm pushing this type of suit.
Here is the intro from this blog by the “D&O Diary’s” Kevin LaCroix:
Last summer and early fall there was a rash of shareholder derivative lawsuits – mostly filed in California, mostly filed against tech companies – based on allegations that the target companies’ boards had breached their duties by failing to include African American board members.
The filings of these kinds of lawsuits trickled off after the California legislature adopted a bill requiring companies based in California to meet specified board diversity requirements. However, if a recent lawsuit filed is any indication, the board diversity lawsuit filing trend may not have entirely played out after all. On February 9, 2021, a plaintiff shareholder launched a new board diversity lawsuit, this time against the board of Micron Technology. As discussed below, this most recent lawsuit is different than the earlier lawsuits in certain key ways. Here is the complaint.
And then here is another excerpt from Kevin’s blog:
Though Micron Technology is a tech company, it is based in Idaho, not California. Because it is not based in California, the California legislation is irrelevant, which may explain why this lawsuit was filed despite the sequential pattern I noted above. However, Micron Technology’s shares are traded on NASDAQ, meaning that it would be subject to the proposed NASDAQ board diversity guidelines, assuming the listing guidelines are approved by the SEC.
Though the NASDAQ guidelines, if enacted, would seemingly compel Micron to diversify its board, the NASDAQ board diversity requirements are not as extensive as the board diversity proposal the new complaint seeks. In addition, the new complaint seeks a variety of other relief beyond just board diversity itself, including a number of other measures purportedly calculated to advance company leadership and company workforce diversity.
As noted above, this new lawsuit differs somewhat from the prior diversity lawsuits, at least to the extent the prior lawsuits targeted California lawsuits. This new lawsuit is different in another respect which is that most of the prior lawsuits were filed by the same plaintiffs’ law firm, Bottini & Bottini. The two prior lawsuits that were not filed by Bottini & Bottini were filed by the Robbins Geller law firm. This lawsuit was not filed by either of these two firms; rather, it was filed by the Farnan law firm (based in Delaware) and The Rosen Law Firm (based in New York).