66 No. 78 JUSTICE “investments of equal value” rule would not allow Israel divestment short of a thorough economic analysis demonstrating that divesting from Israel had an economic basis.24 Given Israel’s status as a tech hub and “startup nation,” investing in the country has a solid track record of being profitable.25 In fact, the Israeli stock market broke all-time records in 2026.26 Of course, ERISA guidelines may be changed by future presidential administrations, particularly if the current Congress does not codify the present interpretation of the law.27 For the time being, however, as interpreted by the Trump Administration, ERISA provides a significant roadblock to attempts to boycott or divest from Israel.28 State Laws and Public Pension Funds State pension codes also curtail efforts to boycott Israel. State and city pension funds are significant financial institutions with investments of trillions of dollars.29 State pension codes, passed and amended by each state’s legislature, provide the rules by which state and city pension trustees make investment decisions. Almost every state pension code includes language similar to ERISA, requiring fund trustees to make investment decisions solely for the benefit of the fund’s beneficiaries.30 However, state legislatures can make policy determinations that supersede the requirement to invest only “for the exclusive purpose of providing benefits.”31 For example, in the 1980s and 1990s, many states modified their pension codes to divest from South Africa due to apartheid.32 More recently, some states made the decision to divest from tobacco or fossil fuels based on public health and environmental concerns.33 States have also divested their pension funds from Russia over its invasion of Ukraine.34 By making that legislative judgment, the legislature ensures that the decision to boycott a country or avoid a particular type of company is no longer a fiduciary decision. If a state prohibits investment in tobacco, for example, a fund trustee cannot invest in tobacco companies even if they have the most attractive risk-reward profile.35 While state legislatures could exercise this authority to divest from Israel, they have done the opposite. Not only have state legislatures rebuffed calls for divestment, but many states passed laws that counter-divest, that is, that require divestment from companies that boycott or divest from Israel.36 Fourteen states explicitly prevent their state funds from being invested by managers in companies that boycott Israel. In those states, even if a pension fund trustee identifies a promising opportunity to invest in a company that deliberately boycotts Israel, the counterdivestment laws preclude the trustee from doing so.37 Relatedly, beyond pension funds, most states have anticontracting laws, requiring contractors to attest that they do not boycott Israel and prohibiting any state agency 24. Webber, “The Use and Abuse of Labor’s Capital,” supra note 5, at 2142. 25. “2025 Investment Climate Statements: Israel,” available at https://www.state.gov/reports/investment-climate-statements/ israel. 26. Etgar Lefkovits, “Tel Aviv Stock Exchange up Nearly 100% Since Gaza War” (Feb. 5, 2026), available at https:// www.jewishexponent.com/tel-aviv-stock-exchange-up-nearly-100-since-gaza-war/ 27. Webber, “The Use and Abuse of Labor’s Capital,” supra note 5, at 2124; Webber, “Rethinking ‘Political’ Considerations in Investment,” supra note 16. 28. Webber, “The Use and Abuse of Labor’s Capital,” supra note 5; Webber, “Rethinking ‘Political’ Considerations in Investment,” supra note 16, at 10. 29. “Largest U.S. retirement plans 2025” (Feb. 10, 2025), available at https://www.pionline.com/largest-us-retirementplans/2025/ 30. Cole, supra note 11. 31. David H. Webber, “The Other Janus and the Future of Labor’s Capital,” 72 Vanderbilt L. Rev. 2087, 2092 (2019). 32. Schoenberg, supra note 10 (“Massachusetts was the first state to divest from South Africa, and other states followed suit”). 33. ME. REV. STAT. ANN. tit. 5, § 1957, available at https://legislature.maine.gov/statutes/5/title5sec1957-1.html 34. Josh Halpern & Lavi M. Ben Dor, “Boycotts: A First Amendment History,” 47 HARV. J. OF L. & PUB. POL’Y 96, 152 (2024); e.g., Md. State Personnel and Pensions Code Ann. § 21-123.3, available at https://law.justia.com/codes/ maryland/state-personnel-and-pensions/division-ii/title-21/subtitle-1/section-21-123-3/ 35. Webber, “The Other Janus and the Future of Labor’s Capital,” supra note 31. 36. Halpern & Ben Dor, supra note 34, at 97. 37. Id. at 154.
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