Unilever PLC

A securities class action has been filed against Unilever PLC (UL) on behalf of all persons who purchased or otherwise acquired Unilever American Depositary Receipts (“ADRs”) between September 2, 2020 through July 21, 2021.  This case has been filed in the USDC – S.D.N.Y.

Unilever is a British multinational consumer goods company.  Ben & Jerry’s ice cream is one of Unilever’s marquee brands, which remains a wholly owned subsidiary of Unilever with an independent board addressing Ben & Jerry’s Social Mission.  In July 2020, Ben & Jerry’s board passed a resolution to end sales of Ben & Jerry’s products in areas that the board considers to be Palestinian territories illegally occupied by Israel.

The Unilever class action lawsuit alleges that, throughout the Class Period, defendants made false and misleading statements and failed to disclose that in July 2020, Ben & Jerry’s board passed a resolution to end sales of its ice cream in “Occupied Palestinian Territory” as well as the risks attendant to the board’s decision.  Additionally, Unilever’s s description of its legal risks was materially false and misleading because Unilever acknowledged that complying with all applicable laws and regulations was important but omitted discussing Ben & Jerry’s boycott decision, which risked adverse governmental actions for violations of laws, executive orders, or resolutions aimed at discouraging boycotts, divestment, and sanctions of Israel adopted by 35 U.S. states (“Anti-BDS Legislation”).

On July 19, 2021, Unilever and its hand-picked Ben & Jerry’s CEO, Matthew McCarthy, finally “operationalized” the Ben & Jerry’s board’s resolution to boycott Israel.  Ben & Jerry’s announced on its website and through its Twitter account that, upon the expiration of the current licensing agreement by which its products had been distributed in Israel for decades, Ben & Jerry’s would end sales of its ice cream in “Occupied Palestinian Territory” but Ben & Jerry’s would purportedly continue to sell its products in Israel.  On this news, the price of Unilever ADRs fell.

Then, July 22, 2021, CNBC reported that the states of Texas and Florida were examining Ben & Jerry’s actions in connection with the states’ Anti-BDS Legislation.  In addition to condemnation of Ben & Jerry’s boycott by Texas Governor Greg Abbott, CNBC reported that Texas State Comptroller Glenn Hegar, who controls billions of dollars in assets for Texas’ public pension funds, had already told his office to take action.  Similarly, the state of Florida’s CFO Jimmy Patronis, who controls Florida’s public pension funds, told CNBC that his office was already discussing the issue.  In a letter reportedly sent to Ben & Jerry’s CEO, Patronis wrote: “It is my belief that Ben & Jerry’s brazen refusal to do business in Israel will result in your placement on the Scrutinized Companies that Boycott Israel List.”  The letter also stated that Florida would then “be prohibited from investing in Ben & Jerry’s or its parent company, Unilever.”  Being added to the list also meant that Unilever would not be able to enter or renew contracts with the state or any municipality in Florida.  On this news, the price of Unilever ADRs fell more than 5%, further damaging investors.

Ultimately, the states of New York, New Jersey, Florida, Texas, Illinois, Colorado, and Arizona announced decisions to divest their pension fund investments in Unilever due to violations of their Anti-BDS Legislation.