Anti-Boycott Laws: What Are They and How Do They Work?
By a TIJ Contributor
In July 2021, the family-friendly and socially conscious ice cream brand Ben & Jerry’s announced that selling ice cream in the “occupied Palestinian territories” was “inconsistent” with their values as a company. Ben & Jerry’s pulled all of their products from the West Bank, the hotly contested land claimed by both Israel and Palestine, which is home to 300,000 Israelis and over 3 million Palestinians. The Vermont-based ice cream manufacturer was careful, however, to make sure a few things were clear. First, they distanced themselves from the Boycott, Divest and Sanction (BDS) movement, a loosely confederated group that supports, among other things, “withdrawing support from Israel’s apartheid regime, complicit Israeli sporting, cultural and academic institutions, and from all Israeli and international companies engaged in violations of Palestinian human rights.” Ben & Jerry’s made sure to point out that they did not affiliate themselves with BDS. Second, and relatedly, Ben & Jerry’s made sure to declare that they were continuing business in Israel, just not in the West Bank. This is an important distinction — they are not boycotting the government as a whole, just the Israeli presence in the West Bank.
This declaration was met, as all issues relating to Israel are, with strong feelings on all sides. Many pro-palestinan groups were in favor of the move, including some in the Jewish community. Responses from several pro-Israel and Jewish groups, predicatbly, were swift and critical. Even Israeli Prime Minister Naftali Bennet, a long-time proponent of settlement expansion in the West Bank, weighed in on Twitter to call the boycott “anti-Israel.”
All that is interesting, perhaps, but it’s nothing new. Someone says something about Israel, one side condemns it, one side supports it. Old news. What’s more interesting, however, is the legal measures taken stateside to combat the move and punish boycotters financially. 35 American states, from New York to South Dakota and Arizona to Wisconsin, have enacted some form of anti-boycott legislation. While these laws vary state to state, the basic concept is the same. The regulations allow state governments to divest funds from entities that boycott Israel. Let’s look at what these laws say, what they mean, and how they’ve been implemented.
The first amendment to the Constitution protects, among other things, the right to speech, and some have argued that these laws which punish protestors violate this fundamental promise. On its face, this argument does seem to have some validity. After all, the government is favoring one type of speech over another. However, this is far from unusual — the government favors types of speech all the time, doing so, for example, whenever it declares any kind of foreign policy. The government is entitled to the freedom of speech, and it does not need to be neutral, and choosing where to put government funds is generally an extension of the state’s right to set policy. It would almost certainly be illegal for the government to regulate where other citizens could put their money — a law banning BDS supporters from all commerce would more than likely be struck down.
There are other, perhaps more interesting, legal challenges to these laws. One important aspect of these regulations is their state-level nature. Despite some half-hearted attempts, the Federal government has not passed a law divesting from Israel boycotters in any meaningful way, so it has been left to the states to decide. The issue then becomes whether or not the states are infringing on a vital federal power — the ability to set foreign policy. Article I, Section 8 of the Constitution provides Congress with the power to set foreign policy, and Article II provides further diplomatic and military power to the President. Absent from this foreign policy are the states, and for good reason. If Massachusetts declared a different foreign policy than Virginia, coming up with a cohesive national strategy would be much more complex. The legal key to this theory is the Foreign Commerce Clause (I,§8,cl.3), which gives Congress the exclusive power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” So, if the states are prohibited from setting foreign policy, do these laws violate this vital separation?
There are good arguments to be made on either side. On one hand, these laws could easily be seen as intruding on foreign affairs. For example, a President who supported BDS and divested from Israel could find their foreign policy undermined by supposedly subordinate states. This would create the exact conflict the framers feared, damaging the American ability to set foreign policy. On the other hand, one could argue that the scale of these statutes is sufficient to overlook their possible effect on foreign policy. In Board of Trustees of Employees’ Retirement System v. Baltimore, a Maryland court in 1986 ruled that the city of Baltimore could divest from companies that deal with South Africa, since the effect on foreign policy was “minimal and indirect.” These kinds of precedents argue that a state’s right to speak in these instances supersedes its prohibition on setting foreign policy. This argument is certainly a reasonable one, but could lead to a world in which judges decide what constitutes a substantive change to foreign policy, an area far outside their training.
The slew of anti-BDS legislation was triggered in many states by the Ben & Jerry’s announcement. For a handful of states — in particular New York, Florida, New Jersey, Arizona, Illinois and Texas — boycotting part of Israel was sufficient provocation. Pension funds have been the prime mode of divestment, with several states moving the government-provided retirement money elsewhere. In Florida, the state’s blacklist for Israel Boycotters is primarily comprised of Unilever, Ben & Jerry’s parent company, and its subsidiaries.
Clearly, action is being taken. But is it having any effect? Well, it’s hard to say. It is indisputable that Unilever stock has suffered substantially in the time since Ben & Jerry’s made their announcement. The price of Unilever stock has fallen by over 11% over the last several months, at a rate even sharper than the market overall, to the tune of billions of dollars in lost value. However, drawing the straight line from boycotts and counter-boycotts to monetary losses is difficult. After all, Unilever is a multi-billion dollar conglomerate, and Ben and Jerry’s is one of many divisions within this corporate behemoth. However, while sales data isn’t public, it is possible Unilever believes internally that Ben & Jerry’s has substantially hurt their bottom line. In late January, Unilever announced that they would separate Ben & Jerry’s from their main business as part of a corporate reshuffle. Perhaps Ben & Jerry’s boycotting Israel, Unilever stock tanking, and the quiet distancing of Unilever from its subsidiary are all unrelated events. If they aren’t connected, then it is truly a remarkable coincidence. If they are linked, then the anti-boycott laws likely played a large role.
These laws are probably legal, at least to a certain extent, and they might have had a real-world effect within the last few weeks. But are they a good idea? Well, it depends on your point of view. On one hand, these laws seem to help pro-Israel activism, an idea viewed as an abstract positive by many of our readers. In this framework, anything that furthers this cause would be justified. However, a reasonable argument could be made that forcing people to take a stance on Israel could increase opposition to the Jewish State, hindering long-term progress. Perhaps more substantively, it may be important to recognize that Israel is not the only political issue in the universe. These kinds of laws will likely spur copycat legislation if they are upheld as legal and effective. States could divest from companies that support any number of political positions. Regardless of your beliefs, there will come a time when your state disagrees with you, and the government’s increased ability to punish the private sector for their political choices has some worrisome consequences. As Louis Brandeis put it, when dealing with arguments you disagree with, “the remedy to be applied is more speech, not enforced silence.”