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By now most ice cream lovers have heard the news: Ben & Jerry’s is pulling its scoops out of Israel as part of the global Boycott, Divestment, Sanctions movement targeting the Jewish state. While participation in a movement rooted in deep anti-Semitism is itself despicable – so too the political stance that Jews have no right to live in the Jewish Quarter of the Old City of Jerusalem, home to the Western Wall – the decision to inflict economic harm on an Israeli company for political ends also comes with extensive legal, financial and reputational hurdles.
Unilever, a publicly traded company (NYSE: UL) that owns the Ben & Jerry’s brand, faces a rocky road ahead and is already finding itself in deep fudge with states around the country.
As of today, 33 states in America have adopted some form of anti-boycott law that requires the state to blacklist any company that boycotts Israel. Twelve of those states require their pension funds to divest any direct holdings and warn fund managers against indirect holdings of the blacklisted company. Twenty-one other states also prohibit state contracting with the blacklisted firm. In the last 24 hours, Texas and Florida have begun the process of blacklisting Unilever.
To be clear, Unilever made a proactive decision to inflict economic harm on an Israeli-based ice cream manufacturer – Ben & Jerry’s licensee – to influence the Israeli government’s political decisions. That’s a violation of anti-boycott laws adopted by more than half the states in America that will cause significant financial and reputational harm for the corporation.
Unilever is in full control of this decision and could certainly face a shareholder lawsuit once a state divests. Company executives can’t hide behind their merger agreement with Ben & Jerry’s because there is no legal document that could obligate a publicly traded company to violate federal or state laws and put the company and its shareholders in jeopardy.
For an even deeper dive into the issue, check out this column in Newsweek.
Richard Goldberg is a senior advisor at the Foundation for Defense of Democracies. A former chief of staff to the governor of Illinois, he spearheaded passage of the first state anti-BDS law in America in 2015.Published in