US | Analysis of employee Israel-Palestine activism

Activism by staff at US companies related to the ongoing conflict in Gaza is likely to be uncommon and minimal over the coming months; however, reputational risks are very likely to persist beyond the end of the ongoing hostilities.

• The primary form of internal activism that companies will probably face is workers’ unions issuing statements related to the conflict
• The reputational risks currently facing companies on this issue are very likely to persist beyond the end of ongoing hostilities

Protests by staff at US companies related to the ongoing conflict in Gaza will probably be infrequent over the coming months. Most recent protests over the issue in the US have occurred at universities, and we have seen few signs that a similar campaign will emerge among workers. This is partly because US labour laws allow employers to easily dismiss staff who disrupt the workplace or who are judged to be intimidating colleagues. Even so, companies that operate in or have ties to Israel are likely to face calls for them to be boycotted to pressure them to divest from the country.

Employee protests likely to remain limited

Large or disruptive staff protests within US companies over Israel’s offensive in Gaza have been uncommon this year. The most prominent publicly reported instance of this so far involved Google firing more than 50 employees last month. According to a Google statement issued on 30 April, the dismissed workers’ conduct caused other employees to feel unsafe. We have not seen any reports of other cases. We suspect that this is partly because employers do not want them publicised.

Many employees seem to have alternatives to protesting over the issue. In recent years, diversity and inclusion initiatives in the workplace have led many businesses to create working groups and channels where staff can express their views on social issues. Based on conversations with employees at US-based firms, the 2020 death of George Floyd was a catalyst for this (he was an African American man killed by police, which led to a months-long period of social justice protests countrywide). Concurrently, many employers have also started to offer their staff access to mental health services.

The potential for dismissal will also probably deter many workers from protesting against their employers. US labour laws related to worker protection afford employees limited rights, based on public policy think-tank reports. Since the latest Israel-Hamas conflict began in October 2023, several CEOs of major US companies have said in the media that they do not want political activism within the workplace. Given that this issue will clearly remain highly polarised, we suspect that companies’ positions will very likely remain unchanged.

Labour unions issuing statements related to the conflict is likely to be the main form of internal activism that companies will face. This is based on most instances of employee activism related to the conflict to date. In our analysis, this is because such actions allow workers to voice their opinions without risking being dismissed. Given the risk of dismissal, we doubt that unions would call for strikes, walks outs or sit-ins over the Israel-Hamas conflict.

Companies face reputational risks due to the conflict

Activists appear to be trying to tarnish the image of businesses they perceive as supporting Israel. A range of domestic and international groups have called for consumers to boycott and the government to sanction companies they perceive as supporting Israel in recent months. Activists have also called on firms to disclose their investment profiles and divest from any business that profits from Israel.

These campaigns have been led by pro-Palestine activists, student groups, and anti-war activists. These calls have generally been directed towards major companies mostly in technology, defence, banking, and food and beverage industries.

Multinationals that either operate in Israel or have contracts with its government have been the main target of activists’ calls. But some US-based parent companies have borne the brunt of the actions of their partners in Israel. For example, McDonald’s faced widespread boycotts in the Middle East and Asia in late 2023 after one of its franchises in Israel announced that it was providing free meals for Israeli soldiers. And due to the lost revenue caused by the boycotts, McDonald’s last month bought the 225 restaurants previously owned by its local franchisee.

The reputational and financial impact of these activist campaigns within the US is likely to remain limited. To date, we have seen little evidence of calls for boycotts, direct action or sanctions gaining significant traction with the public or government officials. Nor are there observable indications that they have led to impactful financial losses in the US. However, some American firms have publicly said their sales in the Middle East and Asia fell as a result of the conflict.

Company leaders publicly taking a position on the Israel-Hamas conflict would probably lead to investor backlash though; this would be likely to affect the share price of publicly listed firms. In one case, the CEO of Hims & Hers Health Incorporated (a telehealth company) voiced his support for pro-Palestine student protesters. Two days later the value of his companies’ stock reportedly dropped by 8%.

In any case, negative publicity campaigns online are very likely for firms that have taken a strong public stance on the conflict or have public ties with the Israeli military. In recent months, this has mainly consisted of activist groups distributing flyers and uploading videos on social media criticising firms, especially those in the defence, finance, and retail sectors. Media reports suggest that there have also been instances of activist groups calling on employees at firms supportive of Israel, or with ties to Israel, to quit their jobs.

Triggers for internal protests and smear campaigns

Below we have provided a list of actions by companies and events that, in our assessment, would make internal protests at companies likely or lead to greater exposure to negative publicity. These include:

• The media reports on what activists perceive to be inflammatory comments about the conflict by company leaders or board members
• A company issues a public statement of support for either side of the ongoing conflict
• Evidence emerges that a company has contracts or ties with the Israeli government, Palestinian government, or Palestinian political groups and entities that were previously not public
• Evidence emerges showing that a company provides financial support or donations to controversial politicians or political groups in Israel or Palestine
• A company solicits or accepts financial support from Israeli or Palestinian political and/or business entities
• A company invites or hosts controversial Israeli or Palestinian public and political figures at official events

Reputational risk likely to persist beyond end of conflict

There is a high likelihood that the reputational risks facing businesses on this issue will continue beyond the end of the current conflict. Ongoing investigations into alleged Israeli war crimes and rights abuses will probably sustain a high risk of further activism and calls for companies to divest from Israel over the coming year. And in the very likely event that hostilities between Israel and Palestinians restart in the long term (within five years), this would again serve as a flashpoint for heightened reputational risks for businesses with ties with Israel or Palestine.