Academic Israel boycotts can violate corporate law
Winter is the season of many academic association annual meetings—and with them, a predictable wave of proposals for these groups to boycott Israel. I have an op-ed in today's Wall Street Journal, co-authored with "Deal Professor" Steven Davidoff Solomon, explaining how boycotts by scholarly associations can violate corporate law, allowing members to sue to enjoin the measures.
Academic association boycott actions may be invalid under the ultra vires doctrine of corporate law. That rule limits a corporation from acting beyond its chartered purposes. In the modern era, ultra vires has little relevance for regular "all lawful purpose" for-profit companies. However, it still matters for non-profits, which often specifically limit their activities and goals in their constitution. Such constitutional limitations are binding, and corporate actions that go beyond the express constitutional powers and purposes can be enjoined.
As we explain in the article, most scholarly associations' constitutions dedicate them solely to advancing knowledge and research in their field. Such purposes not only fail to authorize boycotts but also exclude them:
A boycott by definition restricts study and research: The explanatory material attached to the AAA resolution, for example, says it would restrict the organization from sharing scholarly journals with Israeli universities.
Saying that organizations cannot act beyond the purposes specified in their charters is no mere legal nitpicking. The charter is an explicit contract with members, declaring that their money will be dedicated to agreed-upon goals and that their group will not turn into a motorcycle club or a political party.
Although some major academic organizations have thousands of members, they are generally run by a small staff and a board that effectively controls the agenda. The purposes named in their charters are meant to protect the overwhelming mass of members who cannot get involved in the minutiae of the organization's affairs, to ensure that the organization cannot be hijacked for a fundamentally foreign purpose, and to protect minority members. The charter is the minimal assurance that while an organization may act unwisely, it will be at least in the category of fieldwork, education and research, not beekeeping or boycotts.
Whether a particular boycott resolution is ultra vires depends on both the group's constitution and the wording of the resolution itself. Some BDS resolutions are simply non-operative denunciations of Israel; they probably do not constitute a corporate act. On the other hand, decisions like the one being considered by the American Anthropological Association (or the one passed last year by the American Studies Association), which would exclude Israeli entities, have real bite, and thus fall outside of the group's "Statement of Purpose."
The American Historical Association's Constitution is a strong example of one that strictly limits the group's purpose to academic matters—"research" and the "broadening" and "dissemination" of knowledge.
The AHA boycott resolution is relatively narrow. Unlike the National Women's Studies Association resolution adopted last week, it is not simply declarative, but it does not bar ties with Israel scholars or institutions. It does, however, give the AHA the job of "monitoring Israeli actions restricting the right to education in the Occupied Palestinian Territories."
This provision, in effect, turns the AHA from a historical scholarly organization into a human rights watchdog, which is an entity of an entirely different character. There are many organizations dedicated to monitoring Israel's conduct, and AHA members are free to join them, but this is not a historical endeavor, or even related to one. Neither monitoring "the right to education" nor the real-time conduct of foreign governments is remotely an activity "in the interest of history." AHA members and donors are protected by the group's Constitution from having their organization use their membership fees and donations to "monitor Israel actions … in the Occupied Palestinian territories" as much as they are from having the organization turn its efforts to the monitoring of the movements of the planets.
The AHA, like the ASA and many other groups, is chartered and based in the District of Columbia. Courts in D.C. have in recent years used the ultra vires doctrine against educational non-profits in several cases. These cases have taken a fairly strict view, holding for example that it could be illegal for a group to terminate memberships except for the specific reasons mentioned in its Constitution. Compton v. Alpha Kappa Alpha Sorority, Inc., 64 F. Supp. 3d 1, 19 (D. D.C. 2014); Daley v. Alpha Kappa Alpha Sorority, Inc., 26 A.3d 723, 731 (D.C. Ct. App. 2011).
Doubtless the board of the AHA (called the Council) would thus exercise its power to veto the boycott resolution, as it is empowered to do for "any measure adopted at the business meeting that it believes to be in violation of the Association's constitution." As we note in the article, officers of these groups may be individually liable for damages for ultra vires actions.