Ben & Jerry’s, the Vermont-based ice cream company known for its bold social stances, has filed a lawsuit against its parent company, Unilever, accusing the multinational consumer goods giant of undermining the ice cream maker’s social mission and silencing its efforts to support Palestinian refugees. This lawsuit is the latest chapter in an ongoing dispute between the two companies that has its roots in a disagreement over political activism, corporate governance, and the future direction of the Ben & Jerry’s brand.

A History of Tension

The relationship between Ben & Jerry’s and Unilever has always been complex. Founded in 1978 by Ben Cohen and Jerry Greenfield, Ben & Jerry’s has long prided itself on its commitment to social justice and activism. The company’s mission was not just to produce premium ice cream but also to advocate for progressive causes such as environmental sustainability, human rights, and racial justice. This ethos remained central to its brand even after Unilever, a global conglomerate, acquired the company in 2000 for $326 million.

The tension between the two companies reached a boiling point in 2021, when Ben & Jerry’s announced that it would stop selling its products in the Israeli-occupied West Bank, citing the incompatibility of operating there with its social mission. This decision triggered an intense backlash, especially from pro-Israel groups and some of Unilever’s investors, who viewed the move as too politically charged. Unilever, caught in the crossfire, sold its ice cream business in Israel to a local licensee, allowing the product to continue being sold in the region.

Ben & Jerry’s then sued Unilever, arguing that the sale violated the terms of their agreement, particularly the stipulation that Ben & Jerry’s independent board would have the final say over the company’s social mission. This lawsuit, filed in 2021, was settled in 2022, with both companies agreeing to maintain the ice cream maker’s commitment to social issues.

However, according to the current lawsuit filed in New York federal court, Ben & Jerry’s argues that Unilever has breached the terms of that settlement. Specifically, the company claims that Unilever has consistently blocked its attempts to publicly express support for Palestinian refugees and other human rights causes. In the filing, Ben & Jerry’s asserts that its independent board has made four separate efforts to speak out on these issues, only to have those statements suppressed by Unilever.

The Core of the Dispute

At the heart of the lawsuit is the question of corporate governance. Ben & Jerry’s claims that under the terms of the 2022 settlement, Unilever is obligated to “respect and acknowledge the Ben & Jerry’s independent board’s primary responsibility over Ben & Jerry’s social mission.” However, the ice cream maker argues that Unilever has not upheld this agreement. The lawsuit describes how Ben & Jerry’s board attempted to issue statements in support of peace, a ceasefire, and the safe passage of Palestinian refugees, as well as to advocate for a halt in U.S. military aid to Israel, only to be blocked by Unilever.

Unilever, for its part, has denied these allegations. In a statement issued in response to the lawsuit, the company expressed sympathy for the victims of the violence in the Middle East but rejected the claims made by Ben & Jerry’s social mission board. The company emphasized its intention to defend itself strongly in court, without commenting further on the specifics of the ongoing legal matter.

The Spin-Out and Corporate Future

The dispute comes at a time when Unilever is planning to spin out its ice cream business next year. This move will separate the ice cream business, including Ben & Jerry’s, from Unilever’s other products, such as Dove soap, Knorr bouillon cubes, and Hellmann’s mayonnaise. Experts on corporate governance see the separation as a critical moment for both companies, especially as Ben & Jerry’s role in the new structure could pose challenges for potential buyers, such as private equity firms or competitors.

Minor Myers, a professor at the University of Connecticut School of Law, noted that the tensions between Ben & Jerry’s and Unilever could impact the sale of the ice cream business. “The Ben & Jerry’s situation would be front of mind of any possible buyer,” Myers said, adding that if Ben & Jerry’s continues to be “liberated” to express its views on political issues, it might lower the value of Unilever’s ice cream brands. This could be a concern if the business is acquired by a private entity that is less sympathetic to the brand’s social activism.

The situation might be less problematic if the ice cream business becomes a separate publicly traded company, Myers suggested, as Ben & Jerry’s could maintain its independence and continue to champion social causes while navigating its corporate challenges.

The Impact of Political Stances

Ben & Jerry’s has long made it clear that its social mission is integral to its identity. The company has supported numerous progressive causes over the years, including environmental sustainability, LGBTQ+ rights, and racial justice. The decision to boycott the West Bank was seen as a natural extension of this ethos, but it also placed the company at odds with the geopolitical realities of the Middle East, as well as with some of its shareholders.

The company’s social mission is managed by an independent board, which is responsible for making decisions related to the company’s activism. This board has historically been free to support political causes, as long as they align with Ben & Jerry’s values. However, the lawsuit suggests that Unilever has increasingly taken a more cautious approach to these issues, fearing that Ben & Jerry’s outspoken political stances could harm the brand’s commercial prospects and alienate consumers.

One area of contention in the lawsuit is the charitable donations that Ben & Jerry’s has made since the settlement. According to the filing, Unilever objected to the selection of certain recipients for Ben & Jerry’s charitable donations, including the left-leaning Jewish Voice for Peace and the San Francisco Bay Area Chapter of the Council on American-Islamic Relations (CAIR). Unilever reportedly raised concerns about the organizations’ criticism of the Israeli government, which it viewed as potentially damaging to Ben & Jerry’s brand image.

The lawsuit also alleges that Unilever’s head of ice cream, Peter ter Kulve, expressed concerns about the “continued perception of anti-Semitism” if the company continued to voice its opinions on issues related to Gaza. These tensions over the company’s charitable contributions further illustrate the deep divide between the ice cream maker’s social mission and the corporate priorities of Unilever.

What’s Next for Ben & Jerry’s?

As the lawsuit moves through the legal system, the future of Ben & Jerry’s social mission hangs in the balance. The ice cream maker has shown no signs of backing down, maintaining its commitment to social activism despite Unilever’s objections. Whether Ben & Jerry’s will be able to continue operating as an independent force for change within the corporate structure of Unilever—or in a newly spun-out ice cream business—remains to be seen.

The case is a powerful reminder of the tension between corporate profit motives and social responsibility, and it underscores the challenges that arise when companies with strong social missions are owned by larger, more profit-driven corporations. As Ben & Jerry’s pushes back against Unilever’s efforts to limit its political voice, it may be setting a precedent for other brands grappling with the intersection of business and activism.

For now, the future of Ben & Jerry’s as a socially conscious ice cream maker is uncertain, but the company’s commitment to speaking out on behalf of Palestinian refugees and other causes suggests that it will continue to push for its values, regardless of the corporate pressures it faces.

(Adapted from Fortune.com)