New York City Council Speaker Christine Quinn wants to kick Chick-fil-A out of New York because its CEO said he opposed gay marriage. She sent the head of New York University, which leases space to the one Chick-fil-A restaurant in New York City, a letter stating, "Chick-fil-A is not welcome in New York City as long as the company's president continues to uphold and promote his discriminatory views [...] I urge you to sever your relationship with the Chick-fil-A establishment that exists on your campus." My guess is that the university will regard this letter more as an unstated threat than as a mere statement of the Speaker's opinion, since universities are pervasively subject to ad hoc government regulations and ordinances, making it imperative to cultivate municipal officials' goodwill. (For example, a university that annoys municipal officials can end up with an enrollment cap, or lose lucrative eminent domain prerogatives. Business owners are often subject to municipal predation that can potentially drive them out of business, forcing them to ingratiate themselves with city officials.)
Government pressure on a private institution to terminate a contract with another private entity due to that entity's speech violates the First Amendment rights of that entity. For example, if a government official pressures a private institution to take action against someone (such as firing an employee) for his speech, that violates the First Amendment, see Korb v. Lehman, 919 F.2d 243 (4th Cir. 1990) (pressure on defense contractor to fire employee for speech); Dossett v. First State Bank, 399 F.3d 940 (8th Cir. 2005); Reuber v. U.S., 750 F.2d 1039 (D.C. Cir. 1985). Government retaliation for speech does not necessarily need to include explicit threats or pressure to violate the First Amendment. For example, if the Government merely reprimands a public employee for his speech, or censures a private citizen for his speech, some courts find that to be a violation of the First Amendment. See Columbus Education Association v. Columbus Board of Education, 623 F.2d 1155 (6th Cir. 1980) (reprimand); Little v. N. Miami, 805 F.2d 962 (11th Cir. 1986) (censure resolution by city council); White v. Lee, 227 F.3d 1214 (9th Cir. 2000) (baseless investigation over speech).
Quinn's pressure comes in the wake of similar attacks on Chick-fil-A by other politicians. As I noted in The Washington Examiner,
[Boston's] mayor said he would block Chick-fil-A from opening a restaurant there because its CEO opposes gay marriage. [He has since retreated from this position]
Similarly, an alderman in Chicago has said he will block a zoning permit needed for a Chick-fil-A restaurant in Chicago because of its CEO's views.
Under the Supreme Court's Umbehr decision, cities cannot punish firms or withhold even discretionary benefits like zoning permits over their speech. The Supreme Court long ago ruled that firms have free speech rights in its rulings in favor of Consolidated Edison and the First National Bank.
Chick-fil-A has faced unusually few discrimination claims of any kind for a restaurant chain. There is no evidence that Chick-fil-A discriminates against gay patrons, and it has restaurants in many cities than ban anti-gay discrimination.
Actually, Chick-fil-A's case against Chicago is even stronger than the business whose free-speech rights were recognized in the Supreme Court's Umbehr decision, which involved retaliation against a business for its speech through denial of government contracts. The First Amendment applies with even greater force when the speech restriction is imposed through regulatory decisions, like a zoning decision, rather than tied to a government contract. See, e.g., CarePartners, LLC v. Lashway, 545 F.3d 867, 872 (9th Cir. 2008). Withholding regulatory approval is even less permissible, since it doesn’t involve the government’s power of the purse.
Nor is there any illegal-discrimination rationale for trying to banish Chick-fil-A, even assuming a city official could just ban a supposedly discriminatory restaurant chain without any due process. Chick-fil-A has had far fewer discrimination claims filed against it than most restaurant chains of its size, and I cannot find any reported case of it being sued for discrimination against gay customers, even though it operates in many cities that have ordinances banning sexual-orientation discrimination in employment and public accommodations.
Moreover, what the Chick-fil-A CEO said was not linked to illegal discrimination against customers or employees, much less linked as closely as the amicus briefs filed by various big corporations in support of the University of Michigan in the Gratz v. Bollinger case, where, to curry favor with liberal Congressmen and politicians, they filed amicus briefs defending a race-based college admissions policy struck down 6-to-3 by the Supreme Court (which held that the policy’s racial discrimination violated both the Constitution, and 42 U.S.C. 1981 – a race-discrimination statute that also applies to corporate America.) Yet no one has ever attempted to ban any of those companies from a city. (Companies make a big deal out of supporting affirmative action as a way of currying favor with liberal lawmakers. It is an indirect form of lobbying. Companies that lobby heavily have outperformed "the S&P 500 by 11 percent a year, every year since 2002, according to The Economist." Sadly, in a world of crony capitalism and big government, a giant corporation's profits now depend as much on currying favor with lawmakers as on making the best product for customers.)