Arkansas law prohibiting state contracts with companies that abstain from boycotts against Israel declared unconstitutional

Arkansas law prohibiting state contracts with companies that abstain from boycotts against Israel declared unconstitutional

The United States (US) Court of Appeals for the Eighth Circuit has ruled that an Arkansas law passed in 2017 that prohibited state contracts with companies refusing to pledge against boycotts on Israel is an unconstitutional violation of the First and Fourteenth Amendments.

According to the 2017 law, contractors were prevented from signing deals with the state unless they agreed to refrain from boycotts against Israel. Contractors could avoid this obligation by offering services at a 20% discount.

The Arkansas Times printed advertisements for a local technical college incorporated into the University of Arkansas System for many years. At the time of renewal of the contract with the college, the Arkansas Times was asked to sign the Israel anti-boycott pledge in order to continue doing business.

They refused, claiming the policy was a violation of their freedom of speech. The American Civil Liberties Union (ACLU) filed a lawsuit on their behalf.

The State of Arkansas argued that boycotts are not protected under the First Amendment because they are "all but invisible absent explanatory speech" and thus not considered expressive content. They also claimed that the law only prohibited an "economic boycott," which is not constitutionally protected.

The Court of Appeals for the Eighth Circuit declared that the law was very broad, focusing on a phrase in the law that prohibits companies contracting with the state from engaging in boycotts "or other actions."

According to the Court, evidence that a government contractor "has taken the boycott action" in association with others (i.e., "at the request, in compliance with, or in furtherance of calls for a boycott of Israel") can be considered to enforce the Act. At a minimum, therefore, a company's speech and association with others may be considered to determine whether the company is participating in a "boycott of Israel," and the State may refuse to enter into a contract with the company on that basis, thereby limiting what a company may say or do in support of such a boycott.10 In this way, the Act implicates the First Amendment rights of speech, assembly, association, and petition recognized to be constitutionally protected boycott activity.

The Court observed, "Supporting or promoting boycotts of Israel is constitutionally protected under Claiborne, yet the Act requires government contractors to abstain from such constitutionally protected activity. Without any explanation of how this condition seeks to "define the limits of [the State's] spending program," it can be viewed only as seeking to "leverage funding to regulate speech outside the contours of the program itself."

The Court agreed that, while the state could prohibit economic boycotts that do not constitute free speech, the restrictions on "other actions" violated the newspaper's First Amendment rights by preventing contractors "from engaging in boycott activity outside the scope of the contractual relationship "on its own time and dime."

The case was remanded to the district court, where it had previously been dismissed. Twenty-six other states have similar laws in place, several of which have also been challenged by the ACLU.