Ben & Jerry's Lawsuit Over "Social-Mission"-Related Contract Related to Its Earlier Sale
A summary from Reuters (Jonathan Stempel) Friday:
A federal judge on Friday dismissed major portions of a Ben & Jerry's lawsuit accusing its former parent Unilever of trying to silence the ice cream maker's social activism, dismantle its board and stop funding its namesake foundation…. Ben & Jerry's accused Unilever of violating the 2000 merger agreement by censoring its speech, which has included protests against the war in Gaza, and ousting a chief executive who supported the company's social activism. The alleged censorship also included an effort to suppress planned criticism of U.S. President Donald Trump as he began his second White House term….
Unilever denied censoring Ben & Jerry's and said the former chief executive voluntarily resigned.
Castel said the merger agreement's "plain meaning" did not afford Ben & Jerry's Class I directors and the Ben & Jerry's Foundation a right to sue on behalf of the company, including on the appointment and removal of directors.
There's also an accusation that Unilever "violat[ed] a 2022 settlement over the sale of Ben & Jerry's trademark rights in Israel, by failing to pay $2.5 million to Ben & Jerry's and $2 million to support Palestinian almond farmers"; the parties "agreed that claims over the missed payments could proceed for now."
Here's the opening of Friday's long decision by Judge Kevin Castel (S.D.N.Y.) in Ben & Jerry's Homemade, Inc. v. Unilever PLC.
Ben & Jerry's Homemade, Inc. ("Ben & Jerry's") was founded in 1978. In addition to its ice cream, it is well known for being "outspoken on—and often on the vanguard of—a variety of societal issues, including those involving human rights and social justice." The company has taken positions on issues ranging from Cold War spending (it launched the "Peace Pop" in 1988) to LGBTQ+ rights (it has offered benefits to employees' same sex partners since 1991). This action arises from the continued desire of the Ben & Jerry's Independent Board (the "Board") to identify the brand with its "social mission" amid pushback from the company's corporate parents, but the issues presented on this motion to dismiss largely turn on contract interpretation….
And here's the court's summary of the allegations in the Complaint:
After more than twenty years of operation in which Ben & Jerry's achieved commercial success, several suitors expressed interest in acquiring the company. One set itself apart from other bidders by agreeing to a unique governance structure that would "preserve[ ] Ben & Jerry's authenticity and autonomy[.]" That suitor, Unilever, prevailed, and the deal was memorialized in 2000 in the "Merger Agreement." The Merger Agreement provided that Ben & Jerry's would have an Independent Board with "primary responsibility" over "the objectives of the historical social mission" and "the integrity of the essential elements of the Ben & Jerry's brand-name[.]"
Per section 6.14(a) of the Merger Agreement, seven of the eleven seats on the Board must be filled by independent directors. The shareholder of Ben & Jerry's is required to cause the appointment of new independent directors nominated by a majority of then-seated independent directors. With respect to removal, Conopco "shall remove any director of any Class at the written request of at least a majority of the directors of such Class then in office" but "shall not otherwise remove any member of the Company Board[.]" Directors serve one-year terms and consult on the appointment and removal of the Ben & Jerry's CEO, among other responsibilities. "Each member of the Company Board … and all employees of [Ben & Jerry's] shall agree to abide by the Unilever Code of Business Conduct[.]"
Over time, the Board and Unilever began to clash over certain business decisions. For example, when in 2008 the Unilever-appointed CEO of Ben & Jerry's proposed closing the company's factory in Waterbury, Vermont, the Board opposed the closure on the basis that it "would have devastated the local economy." Unilever ultimately agreed to abide by the Board's decision not to close the plant in Waterbury, which is today "one of the company's most efficient[.]"
In 2022, the Board and Unilever were no longer able to resolve their differences outside of court. The Board sued Unilever when it licensed Ben & Jerry's trademark rights "in the Occupied Palestinian Territories … sans the Independent Board's approval[.]" The litigation ended with a "Settlement Agreement" between Unilever and the Board. The Settlement Agreement provides that Unilever and Conopco will "[c]ontinue to source at least 50% of the non-dairy base mix in North America from Canaan Fair Trade for the next ten years, subject to availability of supply, consumer safety or quality concerns." Canaan Fair Trade, a Palestinian supplier, has provided Ben & Jerry's with ice cream ingredients "for nearly a decade[.]"
The Settlement Agreement also required Unilever to "make two $2,500,000 payments to Ben & Jerry's" that "[u]nder no circumstances" would be made later than July 30, 2023, for the first payment, or July 30, 2024, for the second. The Board's Chair was required to engage in good faith consultation with Unilever on the ultimate recipient of those funds, and Unilever promised that its "consent [would] not be unreasonably withheld."
After the then-Chair of the Board, Anuradha Mittal, in June 2024 designated Jewish Voice for Peace and the San Francisco-Bay Area Chapter of the Council on American-Islamic Relations as potential recipients, Unilever responded with objections that "were riddled with inconsistencies." The Complaint describes Unilever's stated reason for blocking the donations, namely wishing "to remain 'neutral' on the Palestinian-Israeli conflict[,]" as pretextual, citing Unilever's previous donation to an Israeli organization that "acts as an auxiliary service to the Israeli Defense Forces (IDF)."
Subsequently, after "months of negotiations at Unilever's behest," the Settlement Agreement was amended. The "Settlement Amendment" provides that "commencing in 2024, Ben & Jerry's/Unilever will make payments totaling $2 million USD annually to Canaan Fair Trade [ ], directly or through a third party, for the use of Palestinian almonds (or for the direct benefit of Palestinian almond farmers), for at least ten years[.]" It also states that these payments "will be verified by auditors selected by the Independent Board" and that confirmation of the payments "will be sent to the Chair of the Independent Board quarterly." "Unilever failed to disburse Canaan's 2025 funds or engage in the [ ] review process, [ ] insisting upon conditions which do not appear in the Settlement Amendment, even after being provided context and documents from Canaan."
Earlier, Unilever allegedly blocked Ben & Jerry's from speaking out in support of a ceasefire in Gaza, the free-speech rights of protestors, and Black History Month. In December 2023, for instance, Unilever was told that Ben & Jerry's would issue the following statement in response to the conflict in Gaza: "Ben & Jerry's calls for peace and a permanent and immediate ceasefire." Unilever allegedly responded by "threaten[ing] to dismantle the Independent Board and sue the board members individually[.]"
Eventually, the Ben & Jerry's CEO David Stever became embroiled in the conflict between Unilever and the Board. In early 2025, Stever received a performance review that "chastised [him] for 'repeatedly acquiesc[ing]'" to the Board. In March 2025, Unilever told the Board that it planned to remove Stever as CEO. Despite Unilever's promise in the Merger Agreement to consult in good faith with the Board on the removal of the CEO, it "attempted to impose an arbitrary four-day deadline for the Independent Board to convene, appoint a committee, analyze the merits of removal, [and] draft a 'consultation' in writing[.]" Unilever also refused the Board's request for its "minutes, notes, and materials related to the removal decision[.]" During "Mr. Stever's tenure, Ben & Jerry's outperformed Unilever's ice cream portfolio[.]"
The Ben & Jerry's Foundation, a private charitable organization founded with an initial gift from Ben & Jerry's co-founder Ben Cohen, also has drawn the attention of Unilever, and subsequently, Magnum. In 2025, Unilever requested, for the first time, an external audit of the Foundation. The audit was billed as "routine[.]"
The media, however, reported that Unilever's "true target" was "a series of grants to the Oakland Institute [where Chair Mittal serves as executive director], a nonprofit that promotes global aid and is critical of the World Bank and Israel." Instead of reviewing the Foundation's financials or its national grants, the auditors "instead … focused on [ ] discretionary grants and purported ideological objections." Though Unilever "committed" to sharing the audit's findings, it had not done so at the time the Complaint was filed. Apparent leaks, however, "confirmed to the media" that "the audit did not find wrongdoing, ethical malpractice or violations."
Section 6.14(h) of the Merger Agreement provides that Ben & Jerry's "shall continue the Company's practice of making charitable contributions" and that the Board "shall have the responsibility for allocating" those charitable contributions among recipients. The Board is permitted to disburse funds to the Foundation so long as certain requirements are met, such as that "the Foundation does not significantly change its charitable purpose[.]" From 2000 to 2024, the Board allocated funds to the Foundation on an annual basis without incident, totaling $68 million. The Foundation has not received the contribution that the Board allocated to it in 2025.
In September 2025, Mittal, who served both as Chair of the Independent Board and as trustee of the Foundation, "was informed that Unilever had launched an 'integrity' investigation against her." In a meeting with Unilever's General Counsel the following month, Mittal was allegedly presented with an ultimatum. If she were to resign and the Board dropped the present action before this Court, Unilever would provide her "with a prominent position in a multi-million dollar, Unilever-funded nonprofit." If she were to refuse, "Unilever would be making public allegations against her in its forthcoming prospectus." "Mittal immediately refused Unilever's inappropriate offer."
The allegations against Mittal included that she "had received inappropriate benefits from the Foundation[,]" "breached Unilever's Code of Conduct" by "challenging" Unilever's removal of Stever in this action and disclosing portions of his performance review, and "refused to participate" in the audit of the Foundation. In response, "the independent directors put forward a series of questions highlighting the weaknesses of Unilever's accusations[.]"
On December 6, 2025, Magnum demerged from Unilever and became a publicly traded company, bringing Ben & Jerry's with it…. In the registration statement Magnum filed with the S.E.C. ahead of the demerger, it alleged that Mittal was "unfit to continue in her role."
Magnum began exerting pressure on the Foundation, claiming authority under the Merger Agreement to control its "governance, policies, and practices[.]" It soon informed the Foundation that "it would 'conclude that the Foundation no longer seeks funding'" unless it were to agree to certain changes by December 16, 2025.
Magnum then moved to oust the independent directors. To effectuate the removal, it amended Ben & Jerry's bylaws and articles of incorporation to impose a nine-term limit on directors' one-year terms and require the independent directors to accede to the Magnum code of conduct. On December 15, 2025, "Magnum purported to remove Chair Mittal 'effective immediately'" and "remove directors Jennifer Henderson and Daryn Dodson 'effective December 31, 2025,' should they not resign" before that date. As to the other independent directors, Magnum had "set up" their removal through the new eligibility requirements.
Magnum also did an about-face on the nomination to the Board of Chris Miller, a Ben & Jerry's veteran and former Global Social Mission Director. When the independent directors told Magnum on December 11, 2025, that they had nominated Miller, Magnum initially congratulated him and described his nomination as "excellent news[.]" A few days later, however, Magnum said Miller had not been "properly appointed" and that the independent directors "were required to inform Magnum of the 'steps taken to ensure his eligibility'" under the amended bylaws….
Go to the full opinion for more.