July 16, 2014
Corporate RFRA Rights and Complicity
Posted by Amy Sepinwall

    Thanks to Usha for inviting me to participate. My main interest in Hobby Lobby goes to the understandings of complicity underpinning both the majority and dissent. These are deeply problematic, as I intend to argue in an article-length treatment of the case. But, in 'Glom fashion, I want to focus here on corporate law claims -- in particular, claims about the purpose and nature of the corporation that the case and commentary advance.

    The question of whether corporations enjoy rights under RFRA has been called "the fundamental" or the "central" question in Hobby Lobby. In fact, I think it's mostly a red herring. And, even to the extent that the question does matter, it cannot be answered without a developed, cogent theory of complicity -- a theory of when and why one comes to bear responsibility for the wrong (or, in this case, supposed wrong) of another. I won't be providing that theory here, but I do hope to show why it is needed.  

            I focus here on three claims about the corporation, and I address each of them in turn below:

  1. The corporation can/cannot exercise religion in virtue of the kind of entity it is.
  2. Limited liability entails that the corporate owners cannot seek to exercise their religious convictions through the corporate form.
  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

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

    I wholeheartedly support the Hobby Lobby majority opinion’s efforts to advance an expansive conception of corporate purpose, which recognizes that corporations are not and need not be brute shareholder value maximizers. Still, the fact that a for-profit corporation can be run consistent with moral or religious beliefs does not make the corporation a moral or religious believer. Instead, and as I have argued here and here, corporations lack capacities central to moral agency. Those same capacities, I now add, are central to having a conscience or exercising religion. If I am right that the corporation lacks these capacities then it would follow that the corporation cannot exercise religion.

    We might think that lots of capacities are necessary to qualify as a moral agent or religious adherent. I focus here on the minimal requirements for religious adherence: first, the capacity to form beliefs, especially beliefs about what one’s religion dictates; and second, the capacity to act in light of those beliefs. It is the “in light of” clause that gets the proponent of corporate religious adherence in trouble. It is one thing for a corporation to act in conformity with a set of religious dictates; it is quite another to say that it is acting in light of them.

    To see this, consider that one abides by the laws of Kashrut (Jewish dietary laws) just so long as one eats only those items that the laws permit. In this regard, vegans are necessarily kosher, because the prohibitions vegans follow overlap completely with those that Kashrut mandates. But it would be a mistake to think that every vegan engages in an exercise of Judaism. The motivation for veganism is different from the motivation to live a life in accordance with Jewish precepts around eating. To qualify as an instance of the latter, one has to know and affirm the Jewish dietary laws, and make choices about what and how one eats precisely because of those laws. This is true of every religious observance – action that merely coincides with a religious precept doesn’t count as a religious exercise; instead, one has to have chosen the observance because one affirms the religious precept upon which it is based.

    But where is the corporate capacity for affirming beliefs? And where can one find the resulting motivation to act in light of the affirmed beliefs? Motivation seems even more important in the religious case than the moral one, because of the focus in religion on the quality of the believer’s soul. While one typically gets a free pass in morality so long as one doesn’t do wrong (even if one’s motivation for refraining from wrongdoing is crass or self-serving) the same isn’t true of religion: One should abide by the precepts of one’s religion because one is committed to doing right by one’s deity. Again, it seems mysterious that an inanimate being would be capable of harboring, letting alone acting in light of, that commitment.

    For all of these reasons, I think we should reject the idea that corporations can exercise religion in their own right. With that said, I think the idea of corporate religious exercise a red herring. Here, I agree with the majority that what matters isn’t whether the corporation can exercise religion but instead whether the corporation’s owners can seek to assert their religious convictions through the corporate form. On that score, things get more complicated.

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

    The HL dissent, along with some lower-court judges and commentators, argues that a corporation’s owners cannot have their cake and eat it too – they cannot claim the protection of the corporate veil where liability is concerned but have the government disregard the veil when it comes to asserting their rights of religious exercise. But it is not clear just why these two things are deemed incompatible. 

    It is undoubtedly true that the corporation is a distinct legal entity. But the fact that some of its obligations, powers and privileges are different from those of its owners does not entail that all must be. There is nothing in the nature of a corporation, or in the nature of limited liability, that makes it improper to treat the corporation as if it enjoyed rights of free exercise as a way of respecting the free exercise rights of its members. Corporations enjoy many rights that are grounded in the rights of their members. Rights of free association, for example, can be ascribed to the corporation in the first instance but their purpose is not to allow the corporation to associate with whomever (or whatever) it wishes but instead to respect the rights of the corporation’s members to associate with one another.

    Perhaps the argument is supposed to be not about some inherent inconsistency between limited liability and an assertion of the owners' constitutional rights through the corporate form but instead about a fear of granting the corporation, or its owners, too much. The thought might then be something like this: "First these people get to protect their personal wealth when the corporation screws up, and now they want to exercise their constitutional rights not only at home, but at work too. The greedy buggers!" As written, the worry is ridiculous.  And yet I am sympathetic to the spirit of the complaint. For-profit corporate owners might well enjoy too much wealth or power or both. We should do something about that. But treading on their constitutional rights just doesn't seem like the right thing to do.

An Interlude: Why Claims About Whether the Corporation, Or Its Owners, Can Claim Rights of Religious Freedom Are Ultimately Irrelevant

    At bottom, Hobby Lobby is about whether an employer may seek a religious exemption from a legal requirement that it provide insurance coverage for contraceptive methods to which the employer objects. Phrased in that way, it is clear that the organizational form of the employer -- whether sole proprietorship, partnership, for-profit corporation, etc. -- is irrelevant. Those who decry the Court's ruling care about women's access to contraceptive coverage, and their concerns arise no matter the organizational form of the employer granted an exemption from the contraceptive mandate, as I argued here. There's a reason why the Democrats' legislative response to HL bears the short title, "Not My Boss's Business," and not "Not My Corporation's Business." And Hobby Lobby's lawyers admit that their concerns don't turn on corporate rights in the first instance either; they turn instead on the interests of the owners. These interests too are independent of the employer's organizational form. Questions about the nature or purpose of the corporation are then beside the point. On the other hand, questions about the way in which the corporation is run -- who has power to determine what the corporation does and upon whom do the corporation's acts reflect -- do matter, as I shall now contend.

Claim #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

    Suppose that the owners of a closely-held corporation have religious commitments that diverge from those of their employees, as is the case when it comes to the majority of Hobby Lobby's employees. Whose commitments should the corporation itself reflect -- those of the owners or its employees? The answer, I think, depends on a prior question -- viz., who has reason to feel morally implicated in the subsidization of (some or all of) the contraceptive methods coverage of which the ACA mandates. 

    And the answer to this prior question in turn depends upon more foundational questions still: Who is taken to be an appropriate object of blame or praise for the corporation's acts? Who has authority over the corporation's acts? Why should we think that subsidizing health insurance that includes contraception makes it the case that use of contraception can be attributed to the corporation in the first place, and from there to those individuals who have reason to feel morally implicated in the corporation's acts?

    In short, we cannot know whether the owners' or employees' or no one's moral or religious convictions should dictate the corporation's position on contraceptive coverage until we know who, if anyone, has reason to hold themselves morally responsible for contraceptive use that the corporation subsidizes. And we cannot know the answers to those questions unless we know when and why responsibility for a wrong extends beyond the person who commits it. All of these are questions of complicity, satisfying answers to which cannot be found in the case or in the larger doctrine. It is these questions, then, that deserve our attention going forward.

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