A. The existing law: Federal law has for decades generally banned participation in boycotts of friendly nations — the chief target being boycotts of Israel. The law requires the president to issue specific regulations that prohibit (with various exceptions):
- ”any United States person,”
- ”with respect to his activities in the interstate or foreign commerce of the United States,”
- refusing to do business with the foreign country or a business from that country
- discriminating based on race, religion, sex, or national origin in employment
- “Furnishing information with respect to the race, religion, sex, or national origin of any United States person or of any owner, officer, director, or employee of such person,”
- “Furnishing information about whether any person” does business with the boycotted country or a business from the country, or contributes money to charities supporting the country, or
- Engaging in certain credit transations related to the boycott,
- when acting “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,”
Such regulations have been issued; they have, among other things, made clear that “person” includes companies.
As David Schraub notes,
This law came about for a very particular reason: the threat of secondary boycotts by Arab countries. Companies which might have no interest in boycotting Israel might do so if, say, Qatar (whose business they value much more) said “you can’t do business with us if you do business with Israel.” The U.S. law counters by saying “you can’t follow the Qatar boycott if you want to stay within American law”. Even for companies where Qatar > Israel, the U.S. is >>> Qatar, so the law effectively neutralizes foreign calls for a secondary boycott.
B. Constitutionally permissible applications: Now in many of its versions, this is essentially a form of anti-discrimination law. Sometimes, it bars discrimination against employees (even in situations where one could otherwise argue that an employee’s religion or sex or national origin is a “bona fide occupational qualification” because of a foreign country’s references, and thus legal). Thus, for instance, in Abrams v. Baylor College of Medicine (5th Cir. 1986), the statute appeared to indirectly help foreclose any argument that discrimination against Jews in Baylor’s rotation program at a Saudi hospital was legitimate.
More broadly, it bars, more or less, discrimination against Israeli businesses. Such discrimination is not protected by the First Amendment — just as the government may bar employers from refusing to do business with job applicants because they are union members, or may bar wedding venues from refusing to do business with prospective clients because they want to celebrate same-sex weddings at the venue, so the government may bar companies from refusing to do business with other companies because they are Israeli. In NAACP v. Claiborne Hardware Co. (1982), the court struck down liability for speech promoting a boycott, but didn’t recognize a general right to engage in such boycotts, or else a wide range of anti-discrimination law would have been endangered. (There might in principle be an exemption under the Religious Freedom Restoration Act for businesses that feel a religious obligation to participate in a boycott, or under the First Amendment for speakers such as, for instance, public-relations agencies that don’t want to create speech that supports the Israeli government. But that’s a separate question, which goes to the presence of rare exemptions and not the constitutionality of the statute as a whole.)
What one thinks of the law beyond the First Amendment question depends on — among other things — how much of a libertarian one is when it comes to anti-discrimination laws or to foreign trade matters, what one thinks of having such laws in theory be enforceable through threat of prison (though in practice, to my knowledge, the law has been enforced through civil penalties). One also might or might not find relevant that the law, by imposing legal constraints on American companies, might free them from legal constraints threatened by foreign governments: If a foreign country is demanding that you boycott Israeli companies and you don’t want to do that, the law may give you a good excuse to give the foreign country and might thus let you do business both with that country’s companies and with Israeli companies.
C. Possible free-speech problems even with the existing law: But the law also, even in its current form, potentially poses First Amendment problems, because it bans not just discrimination but also “furnishing information”: If you, (1) as an American, (2) “with respect to [your] activities in the interstate or foreign commerce of the United States,” (3) “furnish information about whether” a company does business with Israel, (4) “with intent to … further, or support” a foreign boycott of Israel, then you would be violating the law. In practice, that has generally been applied to companies engaging in such speech in order to get business from boycotting countries, for instance by responding to questionnaires that seek information about whether one does business with Israel. That may well be “commercial speech” — speech promoting one’s own products or services to potential customers — and thus less constitutionally protected; the restrictions were upheld on those grounds by the Seventh Circuit in Briggs & Stratton Corp. v. Baldridge (7th Cir. 1984).
Yet on its face, this existing prohibition might apply even to fully protected speech (and not just the less protected commercial self-promotion). The federal regulations define activities in commerce as anything “involv[ing] the sale, purchase, or transfer of goods or services (including information)” in interstate or foreign commerce. So if an American magazine that’s mailed to subscribers writes an article mentioning companies that do business with Israel, and does so with the intent to further or support the foreign boycott of Israel, that might be forbidden by the law. Indeed, even a publication that’s not sold for money might be seen as being “in interstate or foreign commerce” simply because it’s distributed through the mail or online; indeed, the federal threats statute uses “interstate or foreign commerce” in this broad way.
To my knowledge, the law has never been applied to this sort of commercial distribution of information in magazines, newspapers and the like. Still, on its face, the law, with its significant penalties, seems to cover such speech.
D. The proposal: And here is where (finally!) the proposed amendment comes into play. The proposal would extend the law to cover boycotts by international governmental organizations as well as by foreign countries; that itself doesn’t affect the First Amendment analysis. But the proposal would also extend the law to cover actions taken “with intent to … request to impose any boycott by a foreign country” (or international governmental organization), and not just actions taken “with intent to comply with, further, or support” such a boycott.
This proposal indeed seems aimed at going after fully protected speech, and not just commercial self-promotion. Say a magazine publishes an article asking some U.N. organization to boycott Israel, and uses the names of specific companies to illustrate the request (e.g., “the U.N. organization has been doing business with companies X, Y and Z, which have also been doing business with Israel, and this is bad because … ”). On its face, that seems to be forbidden by the proposal.
And while the existing prohibition on providing information with the intent to comply with, further or support a boycott might usually be done just by businesses trying to get more contracts in the face of existing boycotts, providing information with the intent to request to impose a boycott would — I think — be more commonly done for political reasons. This addition thus seems expressly targeted at political advocacy of boycotts, when that’s coupled with information about companies that do business with Israel.
So that’s why I do think the proposed amendment poses a real First Amendment danger, one that is greater than that posed by existing law. Though existing law doesn’t seem to have been applied to political advocacy, and to my knowledge hasn’t even deterred political advocacy, the new proposal — with its focus on requests for boycotts — seems more likely to be applied to such advocacy. And while there’s no general First Amendment right to actually refuse to deal with people or companies on various grounds, there is a First Amendment right to argue that international organizations (and even foreign governments) should impose such boycotts.
UPDATE: E. The alternative reading of the proposal: The reading of the bill I give above matches that offered by the Congressional Research Service, in its summary of the bill on Congress’s site:
The bill prohibits U.S. persons engaged in interstate or foreign commerce from:
But lawyer Bryan Gividen has a good argument that the bill should be read definitely. Consider, for instance, one of the passages that the bill would amend (with the text added by the bill set in bold):
[T]he President shall issue regulations prohibiting any United States person, with respect to his activities in the interstate or foreign commerce of the United States, from taking or knowingly agreeing to take any of the following actions with intent to comply with, further, or support any boycott fostered or imposed by a foreign country, or request to impose any boycott by a foreign country, against a country which is friendly to the United States and which is not itself the object of any form of boycott pursuant to United States law or regulation, or support any boycott fostered or imposed by any international governmental organization against Israel or request to impose any boycott by any international governmental organization against Israel.
The Congressional Research Service read this as barring certain actions done (including certain communications made) with intent to comply with, further, support, or request a boycott by a foreign country, or done with intent to support or request a boycott by an international organization. But Gividen argues that this bars actions (including communications) with intent to comply with, further, or support a boycott or a foreign country’s request for a boycott, or with intent to support an international organization’s boycott or an international organization’s request for a boycott.
I think Gividen’s reading is plausible. (For more on that, please see here.) But it’s far from clear that courts will adopt the reading — given that the Congressional Research Service reads the law as banning Americans from requesting certain boycotts, it seems at least plausible that courts will read the law the same way. (Courts sometimes give Congressional Research Service reports some weight in interpreting statutes, but that doesn’t even matter; my point is just that courts may themselves interpret the words just as the CRS did.) So the law will at least chill some speech that requests boycotts by foreign countries or international organizations, for the reasons given above in Part D.
But even if Gividen’s reading is adopted, that would simply change the First Amendment problem, by changing the advocacy that the law would potentially cover — it wouldn’t eliminate or even substantially reduce the First Amendment problem.
After all, under this alternative reading, it would be illegal to, among other things, “further” or “support” a foreign country’s or international organization’s “request to impose [a] boycott.” The way people usually further or support requests is by advocacy — for instance, by publicly endorsing the request, or providing supporting evidence for the request. Under this reading, if (say) a UN organization requests the imposition of a boycott against Israel, and you publish a magazine article supporting this request, and giving examples of specific companies that do business in Israel, you would be violating the law.
As I mentioned in Part C above, the existing law already poses a potential First Amendment problem, because even the ban on furthering or supporting boycotts by providing certain information (such as by discussing whether a company does business in Israel) could be read as covering political advocacy. But at least furthering or supporting a boycott may be seen as focusing on fundamentally promotional exchanges of commercial information (I don’t do business in Israel, but my competitor does). Furthering or supporting a request for a boycott is language that more naturally covers political argument.
So regardless of which reading of the bill you take, the “request” language exacerbates the potential First Amendment problems with the existing statute. Recent news accounts suggest that the sponsors of the bill may revise it, and I hope the revisions will be an improvement.