July 16, 2014
Corporate RFRA Rights - a response to Amy Sepinwall
Posted by Ronald Colombo

I'd like to thank Amy for teeing up some of the most important issues raised by Hobby Lobby, and for her insightful analysis.  That said, I'd also like to join issue as follows:

1. The corporation can/cannot exercise religion in virtue of the kind of entity it is.

The Diocese of Rockville Center is a corporation.  So is Catholic Charities.  Nonprofit corporations, but corporations nonetheless.  What matters is not their status as a corporation, but rather their religious mission.  It is not the organizational form that matters, but rather the substance of what the entity does.

One could imagine a business corporation with a mission statement such as:

"Honoring the Lord in all we do by operating the company in a manner consistent with Biblical principles."

(Actually, no imagination is necessary - that text is taken from Hobby Lobby's statement of purpose.)

I have trouble understanding why such an entity would be exercising religion any less than a religiously affiliated soup kitchen.  For many, the concept of exercising one's religion through one's work or profession might seem odd or alien.  But for some, one's work or profession might be considered one's "vocation" - a calling from God.  Without judging which individual is "right" or "wrong," I think we can readily recognize that both are making claims that are fundamentally religious in nature

2. Limited liability entails that the corporate owners cannot seek to exercise their religious convictions through the corporate form.

Here I agree with Amy, to a point.  I agree that stripping an entity of First Amendment rights because it enjoys the benefits of limited liability seems quite suspect.  More specifically, it runs up against the doctrine against unconstitutional conditions in my opinion.

That said, I generally do not believe that a corporation should have free exercise rights merely because its owners happen to be religious.  The corporation is, after all, a separate legal entity.  Thus, for a corporation to have free exercise rights, I feel that it, the corporation itself, should be religious in nature.  As per #1 above, this is something I am prepared to find under certain circumstances, but not somehing that Amy is comfortable with.

However, my paradigm is the public corporation.  When it comes to a closed corporation, like Hobby Lobby, I sense that we may be elevating form over substance.  Many closed corporations are operated akin to partnerships, such that there is no separation of ownership and control.  This would seem to permit the owners of the closed corporation to exercise their own free exercise rights via the corporate entity.  Steve Bainbridge has written persuasively on this subject.

3. Divergent beliefs among the corporation’s owners and employees entail that the owners may not seek to exercise their religious convictions through the corporate form

This gets back to my point in number 2, supra.  To me, corporate free exercise rights should ordinarily flow from the corporation's religiousity, not merely the religious beliefs of its owners.  I envision a corporation with a religiously grounded mission statement, and practices and policies informed by its religious principles.  Once we have such an entity, it matters little what the owners, or employees, or customers necessarily believe.  A Catholic school, for example, chartered and organized as such, doesn't lose its status as such just because its employees and students don't happen to be Catholic.  It is a Catholic school by virtue of its foundational structure: its curriculum, the doctrines it teaches, its operational principles, etc. 

As for what religious position a corporation should take or what it should do when the guidance of it mission statement and adopted policies is unclear, that's naturally what it has a board of directors for.  The same way religiously grounded mutual fund companies must make decisions as to which investments are acceptable pursuant to its religiously informed screens and which are not, the board of a religiously grounded corporation would be entrusted to make similar decisions on behalf of the corporation.

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