Lawfare Group Threatens to Sue Coca-Cola Over BDS

June 15, 2015  

Israeli legal rights group Shurat HaDin-Israel Law Center has threatened to sue Coca-Cola on Monday, after Palestinian Arab franchise leader Zahi Khouri openly called for a boycott against Israel. 

Attorneys Nitsana Darshan-Leitner and Robert Tolchin sent a strongly worded warning letter to Muhtar Kent, CEO of Coca-Cola, over Khouri’s actions. 

“This letter is a warning to the Coca-Cola Company that it should rescind its franchise agreement with the Palestinian National Beverage Company, headed by Zahi Khouri, who openly advocates for BDS against Israel,” the letter warns. “The Coca-Cola Company should not affiliate itself with any person or entity calling for a boycott or similar effort against the Israeli government or the nation’s manufacturers, companies, products or services.” 

“Khouri has supported for BDS in at least two op-ed pieces published in US media outlets,” the two attorneys note. “Specifically, the Orlando Sentinel published an op-ed by Khouri in which he advocated for the BDS movement.” 

“On May 11, 2015, The Hill published another op-ed by Khouri in which he expressed his support for BDS and criticized Congress for trying to pass anti-BDS legislation,” they continue. “Khouri has also made patently false and incendiary statements accusing Israel of stealing Palestinian land and culture and comparing Israel to apartheid South Africa.” 

“We wish to put The Coca-Cola Company on notice that the BDS movement’s efforts are unlawful racial discrimination on the basis of national origin and/or race, creed and religion under the International Convention on the Elimination of All Forms of Racial Discrimination (“Anti-Racism Convention”) and numerous U.S. state and federal statutes,” the attorneys state. 

Shurat Hadin then outlines the full extent of the laws Coca-Cola could be violating by continuing to employ Khouri:

  • The Export Administration Act of 1979 (EAA) which discourages, and in some cases prohibits, U.S. companies from furthering or supporting the boycott of Israel sponsored by the Arab League.
  • The Ribicoff Amendment to the Tax Reform Act of 1976 (TRA), prohibiting participation in a boycott of Israel, which includes agreeing to refrain from doing business with companies and/or employing individuals based on nationality, race or religion.
  •  42 U.S.C. § 2000e-2(a), which makes it unlawful for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin; or to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race, color, religion, sex, or national origin. See also 42 USC § 2000e-3(b); 42 USC § 2000a.
  • In addition, Congress is in the process of passing legislation, which has already been approved by the finance committee in both the House and Senate, to discourage politically motivated actions by foreign countries and international organizations seeking to limit commercial relations with Israel.

Shurat Hadin also notes that Coca-Cola is breaking its own company bylaws in continuing to employ Khouri. 

The Company must comply with all applicable trade restrictions and boycotts imposed by the U.S. government. . . These restrictions include, for example, prohibitions on interaction with identified terrorist organizations or narcotics traffickers. Sanctions for non-compliance can be severe, including fines and imprisonment for responsible individuals, and the Company may be prohibited from further participation in certain trade. The Company also must abide by U.S. anti-boycott laws that prohibit companies from participating in any international boycott not sanctioned by the U.S. government.

“Participants in the BDS movement act with the clear purpose and actual effect of nullifying or impairing the recognition, enjoyment or exercise on an equal footing of the human rights and/or fundamental freedoms in the political, economic, social, cultural fields of those persons and organizations whom they seek to boycott, divest from and sanction,” Shurat Hadin added.

The lawfare group also combats the common misconception that calling for an Israel boycott is part of exercising the right to Freedom of Speech. 

“A boycott is not protected by the freedom-of-speech language of the First Amendment to the U.S. Constitution because a boycott is not speech, it is action,” it noted. “Calls for and instruction in implementing unlawful actions are not protected speech (see Holder v. Humanitarian Law Project, 561 U.S. ___, 130 S. Ct. 2705 (2010).”

“In light of the above, we urge The Coca-Cola Company to comply with U.S. law and its own Code of Business Conduct and to rescind its franchise agreement with the Palestinian National Beverage Company headed by Zahi Khouri,” it concludes. “As the French telecom-services firm Orange recently made clear, The Coca-Cola Company should also make clear that it will not support any kind of boycott against Israel.” 

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