Famed ice cream maker Ben & Jerry’s sued Conopco, a subsidiary of parent company Unilever, in Manhattan federal court Tuesday morning alleging a deal Unilever struck regarding sale of the company’s ice cream in the West Bank violates their 2000 merger agreement.
The lawsuit, filed by Houston litigation boutique Ahmad, Zavitsanos & Mensing and New York firm Cohen & Gresser, seeks a temporary restraining order and permanent injunction against Unilever to prevent it and any third parties from selling Ben & Jerry’s ice cream in the West Bank because doing so would “destroy the brand and social integrity Ben & Jerry’s has spent decades building,” the 22-page complaint says. It also claims Unilever breached its merger and shareholders agreements with Ben & Jerry’s from 2000.
“We hope to ensure that this American institution that has built this social integrity for the last 40 years is not trampled over by its parent company and is not tarnished,” AZA associate Shahmeer Halepota told The Texas Lawbook. “Ben & Jerry’s should have the right to speak on issues it chooses to because that’s what the company’s DNA is, and what’s made it such a special company.”
In a statement, a spokesperson for United Kingdom-based Unilever said the company does not comment on pending litigation.
“As we said in our statement of 29th June, Unilever had the right to enter this arrangement,” Unilever’s statement said. “The deal has already closed.”
The lawsuit presents a conflict between the prerogative of Ben & Jerry’s independent board to make decisions about its social missions and its parent company’s authority over company finances and operations. Famously known for taking stances on social issues long before corporate activism became trendy, Ben & Jerry’s criticized the Reagan administration’s large spending on nuclear weapons in the 1980s and advocated for LGBTQ+ rights in the early 1990s when it began offering benefits to its employees’ same-sex partners.
When Unilever acquired Ben & Jerry’s in 2000, Halepota said the ice cream maker’s founders “had the wherewithal to negotiate language that creates an independent board of directors who would be the custodians of Ben & Jerry’s brand and social mission.”
The lawsuit follows an announcement Unilever made last Wednesday that Ben & Jerry’s would be sold in the West Bank through a deal it struck with Avi Zinger, who runs the Ben & Jerry’s operations in the area. Zinger told the New York Times last week that the ice cream will have slightly different branding which entails Hebrew and Arabic labels instead of English.
Beyond the alleged violations of the 2000 merger agreement, Ben & Jerry’s said in Monday’s lawsuit that Unilever’s deal with Zinger contradicts the ice cream maker’s vow last year to cease sales of its products in the Israeli-occupied West Bank as well as Unilever’s initial support of Ben & Jerry’s decision. Ben & Jerry’s announcement was met with criticism and pro-Israel voices accused the company of antisemitism for refusing to sell to Israeli settlers in the West Bank.
Ben & Jerry’s independent board made this decision last July after spending years researching the issue. According to the lawsuit, the company began receiving complaints as early as 2013 about the human rights implications of selling its products in Israeli-occupied territories and as a result formed a committee that met with members of the Israeli government, human rights organizations, former Israeli soldiers, local farmers, Palestinian representatives and UN agencies on the issue.
At the time, Unilever said publicly that it had “always recognized the right of the brand and its independent board to make decisions about its social missions,” the lawsuit said.
When Ben & Jerry’s West Bank distributor sued it and Unilever over the decision to cease sales in the region in April, Unilever even “responded that the distributor’s claims were meritless,” Monday’s lawsuit said.
But Unilever “abruptly” reversed course June 23 when it notified the chair of Ben & Jerry’s independent board that it planned to transfer certain Ben & Jerry’s trademarks and brand rights to a third-party purchaser, who would use the company’s namesake to sell products in the West Bank. Ben & Jerry’s never received a copy of the transfer agreement after it requested one, the lawsuit said.
Ben & Jerry’s independent board filed Monday’s lawsuit after a 5-2 vote Friday in favor of the litigation, the lawsuit said.
Halepota said AZA got involved after the chair of Ben & Jerry’s board “heard of our reputation in terms of being a litigation boutique who is not scared to take on tough cases.
“At its core this is a contract dispute, but it’s a very interesting contract dispute,” Halepota said. “What interested AZA was to work with a company that has been a bedrock of American society for the last four decades.”
Beyond the unique nature of the contract dispute, Halepota said the litigation is about “Ben & Jerry’s ability to comment on certain issues without being muzzled by their parent company.”
In addition to Halepota, the AZA lawyers representing Ben & Jerry’s include John Zavitsanos, Joseph Ahmad, Jane Robinson, Kelsi White and Thomas Frashier.