Boycotts: Generally Not a License for Meeting Contract Termination

2 min

Over the past decade, meeting sponsors have been increasingly boycotting cities and states to express displeasure with local and state policies. Boycotts have been undertaken to protest a state's failure to pass the ERA Amendment, to protest a state's failure to honor Martin Luther King's birthday, to protest statutes limiting homosexuals' rights, and to protest high hotel occupancy taxes, among other reasons.

Whether an organization boycotts a particular city or state is the choice of the organization. However, the organization should be aware that, absent contractual language to the contrary, it may remain subject to liability if one or more meeting contracts exists. For example, contractual language that would be helpful would provide that a state's non-recognition of federal laws or the enactment of laws that directly conflict with the mission of the association will permit the association to terminate the contract without penalty.

While a boycott may be legal under the antitrust laws if it is being undertaken to express dissatisfaction with the political policies of a particular location, the political motivation will not necessarily justify an organization's failure to honor its contracts. Whether an organization will be liable under the contract will depend on both the specific language of the contact and the gravity of the political issue.

Under circumstances where the political turmoil in a particular location could so substantially and adversely affect attendance at a meeting or exposition, termination of a contract may be warranted, depending on the wording of the contract. This is a very high standard, and generally a difficult one to prove. Absent a contractual "escape hatch," an organization that boycotts a particular location for political reasons will likely be liable for breaching any existing contracts to hold its event at that location.

An organization may have sound political reasons for not holding its meeting or exposition in a particular locale, but those political reasons will not generally justify breaching otherwise valid contracts. Accordingly, before entering into a boycott, an organization's contractual obligations should be reviewed to determine what, if any, exposure it may have under existing contracts if it carries out the boycott.