Religion, Corporations, and the First Amendment

Published in Court Decisions (Thursday, April 17, 2014 3:06 pm)

Does a for-profit corporation have a right to the “free exercise” of religion guaranteed under the First Amendment? On March 25, 2014, the United States Supreme Court will hear arguments in a case that has local interest because one of the parties, Conestoga Wood Specialties Corporation, is headquartered in Lancaster County. The case also has national interest because of its roots in the controversial “contraceptive mandate” required by the Patient Protection and Affordable Care Act – AKA “Obamacare” – a federal law that survived constitutional challenge in 2012.   Resolving the case will require the Supreme Court to consider two branches of constitutional law: one involving the right to “free exercise” of religion in the context of commercial activity; and the other involving the scope of First Amendment protections for corporations.  The Supreme Court’s earlier cases on these issues form part of the “legal family tree” of Conestoga Wood, a case that, at its core, questions whether corporations can be exempted from government regulation under the “free exercise” clause of the First Amendment.

At the center of the case is also a family, the Hahn family. Five members of the family, Norman and Elizabeth Hahn and their three sons, own and operate a for-profit business that has 950 employees and manufactures wooden doors and other components for the kitchen cabinet industry. They are members of the Christian Mennonite faith and believe providing health insurance coverage to their employees is required by that faith. The Hahns also believe – and the Government does not question the sincerity of the Hahns’ belief – that abortion is immoral and a sin for which they will be held accountable. According to the Supreme Court brief filed by their attorneys, “The Hahns consider it an abortion to prevent the implantation of a human embryo into its mother’s uterus after its fertilization.” For this reason, the Hahns object to providing health insurance coverage for two types of FDA-approved contraceptives (Plan B, or “morning after pill” and Ella, or “week after pill”) that, they argue, operate by destroying a fertilized embryo.   The Hahns do not object to paying for other types of contraceptives required under the ACA – a fact that has frequently been omitted from the media’s coverage of the case.

The idea of “family” is also important to this dispute because Conestoga Wood Specialties is a “closely held” corporation, meaning that the Hahn family owns all of the equity in the corporation and does not sell its shares to the public. Because the Supreme Court’s usual practice is to decide cases based only on the facts presented by the parties, its decision in Conestoga Wood is unlikely to affect publicly traded corporations. Indeed, the issue in this case is really quite narrow. As framed by the Court, the question it must resolve is “whether the religious owners of a family business, or their closely-held for-profit corporation, have free exercise rights” that are violated by the ACA’s contraception coverage requirement.

The Supreme Court has already addressed at least part of this question: that is, whether a religious business owner has free exercise rights that may be violated by a government mandate.   For example, in U.S. v. Lee, a 1982 case that also has roots in Pennsylvania, a farmer and carpenter who was a member of the Old Order Amish sued the Internal Revenue Service for a refund of social security taxes paid on behalf of his Amish employees. Mr. Lee argued that his payments into the social security system infringed on the free exercise of his religion because the Amish believe that it is a sin not to provide for their own elderly.   As in Conestoga Wood, the government did not challenge the sincerity of this belief. Recognizing that it was not the role of the judiciary to interpret scripture or the Amish faith, the Supreme Court held that compulsory participation in the social security system violated Mr. Lee’s free exercise rights. Nevertheless, the Court ultimately ruled against him because of the government’s “overriding interest” in maintaining a comprehensive social security system. As the Court noted, “Not all burdens on religion are unconstitutional.”

So the Lee case is important to Conestoga Wood for two reasons: 1) it takes the Courts out of the business of interpreting a person’s religious beliefs and 2) it supports the position that a “free exercise” claim can be made by persons engaged in commercial, for-profit activity.  But Lee involved a natural person – not a corporation – so it doesn’t completely address the Court’s question.

Thus, the Court must consider the second branch of Conestoga Wood’s legal family tree: cases that address the scope of First Amendment protections for corporations.   Arguably, the most important of these is the Court’s 2010 decision in Citizens United v. Federal Election Commission, which ruled that a corporation is a “person” for purposes of the “free speech” clause of the First Amendment. In this case, a non-profit corporation, Citizens United for Separation of Church and State, challenged a federal election law that prevented it from distributing, through on-demand cable television, a film entitled, Hillary: The Movie, within 30 days of the 2008 primary elections. Hillary was essentially a 90-minute attack ad designed to influence the Democratic Party primaries; it was clearly “political” speech.   But did the restriction on its distribution violate Citizens United’s First Amendment rights?

In a 5-4 decision, the Supreme Court held that the First Amendment’s “free speech” clause prevented the government from restricting Hillary’s distribution.   In his majority opinion, Chief Justice Roberts wrote, “The Government may not suppress political speech on the basis of the speaker’s corporate identity. No sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporations.” Citizens United thus stands for the proposition that the protections of the First Amendment do extend to corporations – including for-profit corporations.

To summarize: 1) the right to the “free exercise” of religion under the First Amendment is not lost simply because the person exercising that right is engaged in commercial activity (Lee) and 2) a for-profit corporation is a “person” for purposes of the “free speech” clause of the First Amendment (Citizens United). Left unresolved is the key question presented in Conestoga Wood: can a for-profit corporation can exercise freedom of religion under the First Amendment?   We’ll get some insight into how the Justices view that question during the oral arguments in March.   The Supreme Court usually waits until the end of its term to issue decisions in the most controversial cases. So it most likely won’t be until June that we can fill in the next branch of the Conestoga Wood family tree.

— Laurie T. Baulig

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The information contained in this website is provided solely for informational purposes. It should not be construed as legal advice, is not a substitute for legal counsel, and is not intended to create an attorney-client relationship. For legal advice or answers to specific questions, please contact Ms. Baulig.

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Laurie T. Baulig
Laurie T. Baulig

Attorney at Law

With a career spanning three decades, Laurie Baulig has been a litigator for the federal government, a private practitioner, in-house counsel for two business trade associations, and a teacher at a liberal arts college.  She founded Baulig Law with the idea that, at its best, law is a service profession that should be transparent, accessible and affordable.  The firm’s focus on employment law also reflects her philosophy that both businesses and their employees benefit when the workplace is free from discrimination, unfair wage practices, and unsafe or unhealthy conditions.

Laurie began her career as an antitrust litigator for the Federal Trade Commission in Washington, D.C.  She later shifted her focus to employment law as in-house counsel for the American Trucking Associations, one of the largest business trade groups in the nation’s capital.   While at ATA, she travelled across the country explaining the requirements of new laws passed by Congress – such as the Americans with Disabilities Act, Civil Rights Act of 1991, and Family and Medical Leave Act – and regulatory proposals that would have an impact on the trucking industry.   This experience not only confirmed her passion for employment law, but also awakened her interest in teaching.   So she left D.C. for Lancaster, PA in 2008 to serve as adjunct assistant professor at Franklin & Marshall College.  From 2008-13, she taught Human Resources Management, Gender and the Law, and other courses affecting legal rights and responsibilities in the workplace.

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