The Legality of Political Boycotts

The Legality of Political Boycotts – Brief Article

Jed R. Mandel

Recently, several organizations, including the Evangelical Lutheran Church, the Organization of American Historians, and the Alpha Kappa Alpha sorority, canceled scheduled meetings at various Adam’s Mark hotels after learning of the hotel chain’s alleged discrimination against African-American guests during last year’s Black College Reunion celebration in Florida.

Five African-American students, joined by the National Association for the Advancement of Colored People and the State of Florida, brought a lawsuit against Adam’s Mark for racial discrimination. In a separate lawsuit, the U.S. Department of Justice sued Adam’s Mark for discriminating against its black customers by charging them higher prices for rooms and by segregating them into less desirable rooms.

Both lawsuits were settled out of court this year, with Adam’s Mark not admitting to any wrongdoing but agreeing to pay approximately $8 million.

Exercise Your Rights, But Prepare to Pay

What about the dozen or so groups that have canceled their meetings at an Adam’s Mark hotel? Can they legally boycott a hotel? Can they cancel their contracts without penalty? Legal expression of opposition can be unilateral (such as one group canceling a meeting) or collective (with several groups working together to cancel meetings). While some might think that any collective action designed to bring economic harm is illegal, it’s not. First Amendment rights of free speech and assembly outweigh any governmental interest in regulating such conduct. The action of the canceling groups in response to the NAACP’s call for a boycott of the hotel was a legal expression of opposition to the hotel’s alleged discrimination.

Although a group can legally impose economic pressure or sanctions, that doesn’t mean it can cancel contracts with impunity. All hotel cancellations, even those motivated by political beliefs, must be according to the terms of the hotel contract or must be negotiated separately. Thus, the canceling group is still subject to whatever provisions are in the hotel contract.

Even though a contract gives the hotel the right to recover damages from the canceling party, it is unclear whether a hotel in a situation similar to that of the Adam’s Mark would enforce that right. The hotel may decide not to sue for damages to avoid drawing more attention to a bad situation; in addition, the hotel may be trying to rebuild its reputation with past customers. Even if a hotel exercises its contract rights, it may not be successful if the courts, as a matter of public policy, read into the contract an implied right to cancel where there is demonstrable racial discrimination or other inappropriate conduct.

Protect Yourself

To avoid the political fallout of having a meeting booked at a hotel that is alleged to discriminate, it is possible to protect yourself with appropriate language in the contract. Consider an anti-discrimination provision such as the following:

“The Hotel shall not discriminate against any individual on the basis of race, religion, or sex in violation of the individual’s civil rights under federal and state laws. If the Hotel discriminates against an individual in violation of any federal or state laws, such action shall be considered a breach of this contract, entitling the Group to cancel this contract without liability. Any cancellation of the contract under this provision must be made in good faith and be based on reasonable evidence that the Hotel has, in fact, discriminated.”

Although boycotts can be an effective and legal way for groups to express their support for or opposition to a particular practice or belief, groups must ognize that they may have to pay a price.

Jed R. Mandel is a partner in the Chicago-based law firm of Neal, Gerber & Eisenberg, where he heads the trade and professional association practice. He is a frequent lecturer and writer on meeting-related topics.

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