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Michigan pension fund sues Ben & Jerry’s owner over ice cream maker’s Israel policy

The suit alleges that the policy was improperly disclosed to shareholders, and is the latest in a new round of Israel-related developments for the ice cream maker.

(JTA) – Ben & Jerry’s announcement nearly one year ago that it would no longer sell ice cream in “occupied Palestinian territories” is continuing to attract ire, as it finds itself the target of a new lawsuit, an alleged fake-news story and threats of further divestments.

This week, a Michigan police and firefighter pension fund sued the ice cream maker’s parent company Unilever, where the fund has shares, claiming that the conglomerate had improperly concealed the Ben & Jerry’s announcement from shareholders. 

The fund of St. Clair Shores, a Detroit suburb of around 60,000 people and no synagogues, alleges that Unilever should have alerted its shareholders ahead of its subsidiary’s move, knowing that it could cause the company to lose value. The lawsuit seeks to become a class-action suit.

Ben & Jerry’s’ initial announcement caused multiple state pension funds and other sources to divest from the company, devaluing its investment potential. By some estimates, Unilever lost around 8% of its more than $4 billion value over six days following the Israel announcement.

It’s unclear whether the argument will hold weight in court. Unilever acquired Ben & Jerry’s in 2000 from the company’s Jewish owners Ben Cohen and Jerry Greenfield, under a unique ownership agreement that allows Ben & Jerry’s to maintain a separate, semi-autonomous board to make social justice-oriented decisions in line with its founders’ mission. The British conglomerate has long maintained that it has no formal control over the board’s decisions.

However, there are signs that Unilever had at least some advance notice of the Ben & Jerry’s board’s decision and took some degree of action without the board’s input. Board chair Anuradha Mittal told NBC News last year that Unilever had altered the board’s initial draft statement, adding a passage pledging to continuing selling ice cream within Israel’s 1967 borders — a pledge which the Ben & Jerry’s board had not approved. 

Unilever then released the amended statement itself. A separate statement from the Ben & Jerry’s board said the final wording “does not reflect the position of the independent board, nor was it approved by the independent board.”

Ben & Jerry’s has said its 2021 decision to stop selling in the West Bank, which came in the wake of Israel’s violent clash with Hamas in which Israeli forces killed hundreds of Palestinians and Hamas killed over a dozen Israelis, does not amount to a boycott.

Still, that hasn’t stopped outside figures from putting pressure on Unilever seeking to get it to somehow change Ben & Jerry’s policy. Last week New York Gov. Kathy Hochul issued Unilever a final warning saying the stat plans to divest its own funds from the company over the Israel decision if it did not take more decisive action against its subsidiary. This followed the lead of Illinois, Arizona, and several other states that have divested pension funds and other investments from Unilever, often by invoking state laws limiting business with companies that support Israel boycotts.

Also this week, the news site Jewish Insider, citing a surreptitiously recorded cell-phone video, reported that Ben & Jerry’s requires all new employees to watch training videos about the Israeli-Palestinian conflict featuring the Human Rights Watch director Omar Shakir, who was deported from Israel in 2019 due to his alleged support of Israel boycott initiatives. 

The Forward subsequently disputed Jewish Insider’s story, reporting that, while the company did offer a lunch-and-learn video on the conflict featuring Shakir, viewing the video was optional and new employees are not required to watch anything about Israel. After the Forward’s report, Jewish Insider reporter Melissa Weiss tweeted that the organization stands by their reporting.

A separate lawsuit, brought earlier this year by the Ben & Jerry’s Israeli affiliate American Quality Products, Ltd. against Unilever, is alleging that the territories policy violates U.S. laws that restrict business with any company that boycotts Israel. The parties of that suit went into arbitration last week, according to Reuters.

This article originally appeared on JTA.org.

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