I have already blogged about the question whether corporations can assert religious rights, for example to ask for exemptions from generally applicable laws if these laws contradict their ― or their owners’ ― religious beliefs. In a decision issued this morning, Burwell v. Hobby Lobby Stores, which Eugene Volokh summarizes here, the Supreme Court of the United States answered that question in the affirmative. Because this case has attracted a great deal of attention and commentary, it is a good occasion to come back to the question of “corporate religious freedom,” although, as usual, I do not express an opinion as to the correctness of the Court’s decision as a matter of U.S. law. My concern is with first principles.
According to Justice Samuel Alito, who wrote the majority opinion, recognizing and protecting corporations’ religious rights serves
to provide protection for human beings. A corporation is simply a form of organization used by human beings to achieve desired ends. An established body of law specifies the rights and obligations of the people (including shareholders, officers, and employees) who are associated with a corporation in one way or another. When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of these people. For example, extending Fourth Amendment protection [against unreasonable searches and seizures] to corporations protects the privacy interests of employees and others associated with the company. Protecting corporations from government seizure of their property without just compensation protects all those who have a stake in the corporations’ financial well-being. (18)
And protecting corporations’ religious freedom “protects the religious liberty of the humans who own and control those companies.”
Indeed, the U.S. government was prepared to respect the religious beliefs of some corporations ― those whose mission was not primarily to make a profit for their owners. The issue of corporate religion in Hobby Lobby was thus not whether any corporations could have religious beliefs entitled to protection, but rather where, if anywhere, to draw the line between those who could have such beliefs and those which could not. The government (and the dissent) argued that the line should be drawn at the making of profit. The majority questioned why this should be so, pointing out that prior cases acknowledged the capacity of profit-making businesses (albeit not organized as corporations) to bring religious claims, and noting that
modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so. For-profit corporations, with ownership approval,support a wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and other altruistic objectives. (23)
The majority opinion, however, suggests a line of its own, between “closely-held” and publicly traded corporations. At least, it purports only to consider the situation of closely-held corporations, suggesting that the question of corporate religious rights is very unlikely to arise in the case of “corporate giants” (29) or publicly traded corporations more generally.
Does either of these dividing lines make sense? Or should all corporations be considered capable of making religious claims? Or should none?
In a post on Bleeding Heart Libertarians, Jacob T. Levy is skeptical of the U.S. Supreme Court’s reasoning. He thinks that whatever rights corporations have, they have them as distinct legal persons, rather than as extensions of their owners:
the corporation qua property owner has, for example, 4th Amendment rights against its property being unreasonably warrantlessly searched, and 5th Amendment rights against it being taken for public use without compensation, or against being deprived of it without due process of law. …
To say that “corporations are made of people” is to make “a different point, nearly the opposite point, from saying that they are themselves persons.” The reason the Court makes this point is that, unlike for other rights, it doesn’t make sense to say that corporations have religious rights. These rights only make sense if they belong to individuals, the corporations’ owners. But that makes the claim of corporate rights contrived. In short,
[c]orporations are persons, or corporations are made out of people– the two thoughts lead to very different conclusions, and I think protecting the former requires rejecting this kind of easy recourse to the latter.
By contrast, over at the Volokh Conspiracy, Ilya Somin endorses the Court’s logic. For him, “[t]he fundamental point here is that people organized as corporations are people too.” Indeed, in his view, this logic extends to all corporations, and not just closely-held ones, as does the protection of other rights.
I too think that the distinction between closely-held and publicly traded corporations should not matter for defining the rights which corporations should be able to claim. As I suggested here, in response to a paper by Burt Neuborne arguing that closely-held but not publicly traded corporations should have the right to engage in political speech, it would be strange if a corporation lost some rights upon filing an IPO and could then reacquire these rights upon being bought out by a private equity firm. “Rights, we generally think, are universal, if they exist at all.”
And, at least if we insist on speaking in terms of rights rather than limits on government action, I agree with prof. Somin that corporate rights are primarily the rights of individuals. I’m not sure I fully understand prof. Levy’s objection to this approach, but it seems to me that while we are used to speaking of the freedom of expression of the New York Times, there really is, as I suggested in the post just linked to, “something puzzling about a purely legal entity, ‘a nexus of contracts,’ with no mind or personality of its own, having ideas to share.” The puzzle, indeed, is no less than in the case of a purely legal entity which, instead of producing newspapers, runs a church or, say, a religiously-compliant slaughterhouse. In all these cases, corporations themselves have no real moral claims; they have no personality of their own, no dignity, no liberty that we should care about. Corporate rights protect the rights their shareholders, and probably other stakeholders too (I have suggested otherwise in the past, but I am now inclined to think that I was wrong to exclude other stakeholders here).
These rights matters because in going to the marketplace ― whether as businessperson or as an employee ― one does not leave one’s personality behind. One does not surrender one’s identity or one’s beliefs. We recognize this, for example, when we insist that the law protect employees from having to do so, through anti-discrimination provisions. It is only right that people who go into business rather than become employees also be allowed to continue worshipping gods other than Mammon.