Analysis Summary of Modern Anti-BDS Laws

A recent essay by Josh Halpern and Lavi Ben Dor has provided a much needed analysis of the historical and constitutional basis for “anti-BDS laws.” Boycotts: A First Amendment History provides insight into the long-held tradition of government compulsion or prohibition of economic boycotts. They conclude that modern anti-boycott laws are constitutional, enjoy wide historical and bipartisan support, and improve upon historical precedent.

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In response to the Boycott, Divestment, and Sanctions (“BDS”) movement against Israel, the majority of U.S. states have passed anti-BDS laws, which require recipients of public contracts and state investments not to join these discriminatory boycotts. The language and purpose of these anti-boycott laws focus solely on the act of boycotting, while not affecting a recipient’s First Amendment right to free speech. The question for lawyers and free speech advocates becomes whether or not boycotting is a legally protected expression under the First Amendment, or whether it is a form of economic discrimination that can be regulated by the government.

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Halpern and Ben Dor find that boycotts have been subjected to “aggressive governmental control” since the early days of this country. Colonists that refused to boycott British goods were subject to trial, civil forfeiture, and criminal punishment. After the Founding, Americans were compelled to boycott foreign merchants and “Buy American” instead. At common law, American courts consistently held boycotters liable under civil and criminal conspiracy laws when they “unjustifiably” interfered in a third party’s business enterprise. Judges employed an ad hoc balancing test to determine whether a boycott was economically and socially “justified.”

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Boycott regulation continued into the second half of the twentieth century, with governments pushing private companies into compliance with the boycott of apartheid-era South Africa. At the same time, they were using regulations to deter companies from participating in the Arab League boycott of Israel. Instead of the mandates and injunctions used by their predecessors, modern state governments now utilized contracts and tax benefits to promote their “preferred boycott policy.” Throughout this time, there was no charge of First Amendment violations, and governments at all levels touted their authority to implement boycott-related laws.

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Starting in the 1970s, both federal and state governments compelled individuals and companies to participate in an economic boycott of apartheid-era South Africa. By 1990, the majority of states had “taken some form of binding economic action … by divesting public funds from companies that did business with South Africa or by conditioning public contracts on a company’s commitment not to do so.” States required contract recipients to certify their compliance with the state’s boycott laws. The federal government, too, promoted the boycott through the Comprehensive Anti-Apartheid Act of 1986 and the Rangel Amendment to the budget Reconciliation Act in 1987, which imposed import bans and tax penalties on those doing business with South Africa.

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During this time, state and federal governments implemented deterrence policies against those adhering to the Arab League’s boycott of Israel, which was widely held to be discriminatory and anti-Semitic in nature. The federal government imposed civil and criminal penalties and assessed tax penalties. In 1975, President Ford directed the Secretary of Commerce to issue regulations that prohibited companies from “complying in any way with the [discriminatory] boycott requests. Bipartisan congressional efforts led to the Ribicoff Amendment to the Tax Reform Act of 1976, which implemented tax penalties against those who “participate[] in or cooperate[] with” the Arab League’s Boycott. The bipartisan Export Administration Amendments of 1977 directed President Carter to “direct the President to issue regulations prohibiting ‘any United States person … from taking or knowingly agreeing to’ a boycott, ‘with intent to comply with, further, or support any boycott fostered or imposed by a foreign country against a country which is friendly to the United States.’” Additionally, state and local governments withheld public contracts and investments from those who would not comply with anti-boycott measures. By the early 1980s, 13 states had enacted anti-boycott measures of varying degrees. These boycott regulations stemmed from the widespread understanding that the government has full authority to regulate economic boycotts, since it is “not an inherently protected medium of expression.”

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This tradition of boycott regulation continues to this day, along with the government’s decision to support or deter participation in certain economic boycotts. Halpern and Ben Dor find that “consistent with centuries of American legal history, the officials who advance these boycott policies conceive of the boycott as regulable economic conduct well outside the heartland of First Amendment expression or association.”

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Today, the government continues to compel compliance with boycotts they endorse, such as boycotting Russia over the country’s recent invasion of Ukraine. In April, President Biden declared that it is illegal for U.S. citizens to make new investments in the Russian Federation. Multiple states have enacted boycott regulations, declaring that they will not provide state contracts or investments to companies that refuse to boycott the Russian Federation. States like New York have mandated that state contract bidders provide certifications regarding their Russia-related operations. New Jersey‘s governor issued a mandatory review of all state contracts with businesses that have some affiliation with the Russian government, which is “consistent with states’ ‘long history of leveraging [their] economic power,’ through mandatory boycott and divestment laws, ‘to further the[ir] values [and interests] throughout the world.’” This recent regulatory activity confirms that boycotts are regulable conduct, since “no federal court has ever sustained a First Amendment challenge to sanctions regimes like these.

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The government also continues to deter participation in boycotts they oppose, such as the BDS movement against Israel. Currently, 35 states have enacted anti-boycott legislation related to BDS. Halpern and Ben Dor conclude that the anti-boycott laws do not violate the First Amendment, because “they are regulating disfavorable economic conduct, and do not target protected speech or association.” The authors argue that while a boycotter might be hindered in their “methods and objectives,” anti-boycott laws “do not silence dissent or political debate on that subject.” In other words, the anti-boycott laws only target conduct by requiring companies to certify that they will not engage in a boycott of Israel. They are still able to express themselves and engage in their First Amendment rights through other mediums.

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Halpern and Ben Dor also conclude that “today’s anti-boycott laws are not merely consistent with past practice; they actually reflect a constitutional improvement over the regimes of old.” Indeed, modern anti-boycott laws are more precise and targeted, and consequences for noncompliance are less severe than those implemented in the early days of America. Those who violate an anti-BDS law “are not fined or otherwise subject to legal sanction, but merely lose their access to certain privileges like state contracts or investments.”

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By providing the first historical breakdown and analysis of anti-boycott laws, the authors have solved an issue that many in the legal field have grappled with in recent years. The Supreme Court’s 1982 decision in NAACP v. Claiborne Hardware led scholars to ask an important question: is boycotting an expressive behavior protected under the First Amendment or an economic behavior subjected to government control? Modern anti-boycott laws solve this issue, by making it clear that boycott regulation only affects the act of boycotting and not any expressive activities that a boycotter may want to engage in. As a result, if someone wants to both picket and boycott a company over a perceived disagreement, the laws permit them to picket but may forbid them from boycotting, compel them to do so, or take no position, depending on underlying state policy. This is consistent with America’s legal tradition, which has consistently treated the act of boycotting as conduct, not as expression protected under the First Amendment.

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The authors’ findings confirm that (1) boycotts may be regulated as any other form of economic discrimination, (2) modern anti-BDS laws have broad historical and constitutional support, and (3) modern anti-boycott laws improve upon their historical predecessors.