Corporate Conscience?

Religious freedom versus the rule of law

By Mark Hager.

Published on February 16, 2015 with No Comments


Can a corporation have a compromised conscience? That question lurks in the background of Burwell v. Hobby Lobby Stores (Hobby Lobby), an intriguing case decided by the U.S. Supreme Court last summer. The U.S. Constitution’s First Amendment protects religious ‘free exercise.’ This shields all religious adherents from deliberate government persecution but is that all? Or can government violate ‘free exercise’ also when its infringement on religious belief and practice is merely incidental to some unrelated objective?

To pick up the story, we must first go back to the Court’s 1990 decision, Oregon v. Smith. That case involved the scope of constitutional protection for religion. The state of Oregon had placed criminal sanctions on peyote use, which members of the Native American Church (NAC) considered an essential sacrament in their religion. Two NAC members, fired from their jobs (at a private drug rehabilitation clinic!) for peyote use, were denied unemployment benefits on grounds of the criminal actions provoking their discharges. They sued the state, contending that criminalizing peyote was unconstitutional as applied to them because it infringed ‘free exercise’ of their religion. They sought ‘accommodation’: a special exemption from the law on grounds of peyote’s religious centrality for them.

There is no question that peyote criminalization would amount to persecution and would violate ‘free exercise’ if enacted with the purpose of suppressing NAC religious life. But the Supreme Court sustained the Oregon statute’s constitutionality, since its actual purpose was something more like protecting citizen health and morals. ‘Free exercise’ does not require exemption from a generally applicable law just because it has the incidental effect of frustrating some religious practice.

Court dissenters in Smith urged, however, that a non-persecutory governmental purpose should not terminate constitutional inquiry, nor close the door on accommodation. The threat of legal sanction on important practices can go far toward destroying a religion even if that is no one’s purpose. When a law strongly infringes a religious practice, dissenters argued, it should be deemed unconstitutional to require obedience from the faithful, absent a ‘compelling’ governmental interest in having them comply.

What happened next was unprecedented. After heavy lobbying by churches both traditional and nontraditional, Congress–almost unanimously–enacted the Religious Freedom Restoration Act (RFRA) in 1993. When Congress does something unanimously, it almost always bespeaks haste and insufficient deliberation. Essentially, RFRA took the losing dissent position from Smith and enacted it as the law of the land. Henceforth, whenever a law has the effect of infringing a religious practice, adherents shall be excused unless the government can demonstrate a ‘compelling’ interest in having them obey.

Organized as a for-profit corporation, Hobby Lobby is an arts-andcrafts chain store owned and operated by the Green family, evangelical Christians with strong convictions that abortion is wrongful. The Obama administration has sought to fine Hobby Lobby for noncompliance with the Affordable Care Act (ACA), widely known as ‘Obamacare.’ Under ACA, businesses with 50-plus employees must provide them health insurance, including no-cost access to contraceptives, among them so-called ‘abortion pills’ that keep fertilized embryos from attaching to uterine walls. The Green family objects to complying with the health insurance mandate on grounds that it would involve them in abortion, contravening their religious beliefs. The Greens seek a RFRA accommodation, exempting Hobby Lobby from compliance on grounds that it would compromise religiously-based convictions and thereby violate ‘free exercise.’

cc2There were serious questions whether Hobby Lobby’s exemption petition should even be heard. Does it make sense to regard a for-profit corporation as a religious believer? Can the conscience of Green family
shareholders be attributed to their corporation? Is Green family ‘free exercise’ seriously infringed by compliance with a law under which benefits are issued by separate entities (insurance companies) responding to contraceptive choices made by employees? In a close 5-4 vote, the Court answered all these questions in the affirmative or, more accurately declined to address them. Sensitive on religious tradition and perhaps hostile toward abortion, conservative justices (Roberts, Thomas, Scalia, Alito and
Kennedy) ruled that for a ‘closely-held’ corporation like Hobby Lobby (with all shares owned within one family in this case), the family’s religious conscience can be seriously compromised by what their company is forced to do, just as it could be if family members were forced to do it themselves. Since all five of the justices so ruling are Catholic, it is conceivable that Church cc3teachings against abortion had something to do with their stance, though of course this is not supposed to happen.

Once Hobby Lobby’s ‘free exercise’ petition was deemed cognizable, the case boiled down to whether the enforcement of the ACA against Hobby Lobby is the U.S. government’s ‘least restrictive (i.e. least coercive) means’ of ensuring low-cost contraceptive availability to America’s health-insured work force. On this question also the decision produced a straight up 5-4 conservative/liberal split ruling in favour of Hobby Lobby. The majority held that coercing Hobby Lobby compliance is not the government’s least restrictive means. Instead of coercing conscientious corporations like Hobby Lobby to pay for abortion pills, the government could just make the pills available free of charge to women working for such corporations.

Sensitive on women’s rights and reproductive freedom, the dissenting liberal justices (Ginsburg, Sotomayor and Kagan– all women–plus Breyer) find the Court’s holdings astonishing. Writing on behalf of the dissenters, Justice Ginsburg takes issue first with Hobby Lobby’s extension of religious freedom to a for-profit corporation, something it had never done before. To her, this takes both religious freedom protection and the concept of corporate ‘personhood’ entirely too far. A corporation may be a legal ‘person’ in the sense that it can sue, be sued and own property, but Ginsberg finds it ludicrous that such a ‘person’ should have standing to assert claims of religious conscience. Ginsburg has no patience either for Green family claims that its religious conscience is compromised by being compelled through their company to provide insurance that may pay for abortion pills chosen by Hobby Lobby employees. The Green family may sincerely feel that way, but Ginsburg insists that this cannot be the test. A religious exemption can be issued only if the burden on conscience from some legal requirement is substantial and this must be assessed from a neutral standpoint, not from the Green family’s. Otherwise, every sincere religious objection merits an exemption. Finally, Ginsburg takes exception to Hobby Lobby’s holding that government has available a less coercive means of securing low-cost contraceptive access for America’s work force: simply paying for contraceptives itself. If direct provision counts as a less coercive means, government fails the ‘least restrictive means’ test any time it imposes mandatory purchases.


Hobby Lobby follow-on cases are sure to arise and some fear that an open door to religious exemption may undermine rule of law by letting religious groups operate as laws unto themselves. One area of predictable challenge concerns state laws that prohibit companies from discriminating against gay people in hiring. (Such laws exist in some states but not others.) Hobby Lobby critics worry that religious exemptions will punch huge holes in such laws. On religious grounds, some business owners regard homosexuality as a sin and therefore object to hiring gay people. Suppose a family-owned corporation like Hobby Lobby claims religious exemption from a mandate to hire qualified gays, on grounds that the family wishes not to associate with a sinful lifestyle. Under Hobby Lobby, the exemption must seemingly be indulged and this could conceivably eviscerate gay anti-discrimination laws in employment. (Anyone who objects to hiring
gays could claim religious grounds for doing so.) Concern may be overblown, however: the laws may survive religious exemption challenges. States will maintain that there is no ‘less restrictive means’ for preventing anti-gay discrimination than simply prohibiting it. Hobby Lobby notwithstanding, no U.S. court would rule that ensuring gay employment opportunity requires that states hire gays themselves so that private firms need not do so.

A graduate of Harvard Law School, Mark Hager lives with his family in Pelawatte. He consults on legal and writing challenges.


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