The US Court of Appeals for the Eighth Circuit ruled Friday that an Arkansas law prohibiting state contracts with companies that refuse to pledge against boycotts on Israel is an unconstitutional violation of the First and Fourteenth Amendments.

The 2017 law prevented contractors from signing deals with the state unless they agreed to abstain from boycotts against Israel. Contractors could avoid this obligation by offering services at a 20-percent discount.

The Arkansas Times printed advertisements for a local technical college for many years. The school was incorporated into the University of Arkansas System in 2017. When the Times tried to renew their contract with the college, they were asked to sign the Israel anti-boycott pledge in order to continue doing business. They refused, claiming the policy was a violation of their freedom of speech. The American Civil Liberties Union (ACLU) filed a lawsuit on their behalf.

Arkansas argued that boycotts are not protected under the First Amendment because they are “all but invisible absent explanatory speech” and thus not considered expressive content. They also claimed that the law only prohibited an “economic boycott,” which is not constitutionally protected.

In a 2-1 split, the panel of three judges declared the law was overly broad, focusing on a phrase in the law that prohibits companies contracting with the state from engaging in boycotts “or other actions.” The court agreed that, while the state could prohibit economic boycotts that do not constitute free speech, the restrictions on “other actions” violated the newspaper’s First Amendment rights by preventing contractors “from engaging in boycott activity outside the scope of the contractual relationship “on its own time and dime.”

The case was remanded to the district court, where it had previously been dismissed. Twenty-six other states have similar laws in place, several of which have also been challenged by the ACLU.