In an administrative decision, the Department of Transportation has decided that Kuwait Airways violated federal anti-discrimination laws when it refused to board an Israeli passenger traveling from New York to London. The airline was following policy set in accordance with the Arab League's boycott of Israel, which in Kuwait prohibits doing business with an Israeli national. The punishment for violating this law can include hard labor as well as a fine.
This strikes me as an important ruling (and the letter is well-reasoned). Airlines have a "common carrier" duty which generally obliges them to serve all comers, absent good reason for a refusal (I should note that this narrows the decision considerably, since most private entities are not common carriers and thus the presumption is not that they have to do business with any and all comers absent justification to the contrary). The Department, quite properly in my view, did not consider the airline's desire to adhere to Kuwaiti law as a valid ground for the discrimination because the law itself was "part of a discriminatory statutory scheme." It would defeat the purpose of the general aviation non-discrimination requirement if it could be circumvented by a foreign nation simply making the discrimination mandatory. This alone would probably have sufficed for to justify the DOT decision, but it also notes that this Kuwaiti law in particular -- part of its boycott of Israel -- is specifically contrary to U.S. policy, with several statutes and regulations passed which prohibit giving succor to the boycott in the American context.
Though it does not say directly what type of "discrimination" occurred (the relevant statute, 49 U.S.C. § 41310, prohibits "unreasonable discrimination" generally rather than breaking out specific protected categories), the letter strongly implies that refusal to serve an Israeli-qua-Israeli should be understood as a form of national origin discrimination (the Court explicitly analogized it to racial discrimination, long since outlawed on American carriers). That strikes me as obviously right (as I observed when the case was filed), and we're starting to see boycott moves analyzed under this framework.
While I am generally a fan of this move, I don't want to pretend it provides a clear answer to every case. After all, not every hostile action directed at an Israeli entity could properly be viewed as national origin discrimination anymore than someone boycotting (say) McDonalds for its labor practices could be said to be discriminating against "Americans". Moving forward, I suspect two factors will become essential to judicial analysis appraising the legitimacy of boycott efforts, with a third wild card. The first is their breadth. The Kuwait Airways case is an easy one because it banned Israelis tout court -- even if we can infer that Kuwait's reason for enacting its policy was in some way targeted at the Israeli state (for its policies? For existing? No matter.), by instantiating those objections in such an indiscriminate manner to target every single Israeli national it crosses over from targeted critique to unlawful bias. The second factor, which will be much more difficult to figure out in practice, goes to motive. Motive is the heart of contemporary discrimination analysis, and so in this context the question would be "are you boycotting X actor because it is Israeli, or for some other reason [e.g., because it allegedly violates human rights]." Many Jews suspect that the boycott movement really is motivated by anti-Israel (or often anti-Semitic) beliefs rather than a genuine and universal commitment to the supposed human rights practices publicly given as a justification. Hence, for example, the popularity of the "why don't you boycott so-and-so" response, where so-and-so is an entity in a different company that seems to be implicated in a similar network of abuses. This sort of "comparator" analysis is a valid way of establishing discriminatory motive, but in general motive is going to be difficult to prove. Were I to advise would-be boycotters (and that's a weird thing for me to write), I would suggest that (a) the boycotts must be narrowly tailored to particular alleged abusers, rather than sweeping up Israelis generally (so a campaign against Ahava is more likely to succeed than a general boycott of Israeli academics), and (b) to ensure that one does not only boycott Israeli entities but also maintains a diverse portfolio of boycotts so as to demonstrate that Israeli nationality is not the driving force behind the move.
The wild card is the applicability of America's anti-boycott statutes, which seek to prohibit American entities (including American offices of foreign actors) from boycotting certain foreign nationals at the behest of a boycotting state. This law was specifically passed in response to the Arab League boycott of Israel, although it has been enforced only sporadically. To the extent it is held to apply to the BDS movement generally (which presumably goes to the degree to which the movement is considered to be acting at the behest of a foreign state), all bets are off.