After Hobby Lobby: the "religious for-profit" and the limits of the autonomy doctrine.

Author:Carmella, Angela C.
Position:III. Why Balancing, and Not Autonomy, Is Appropriate in the For-Profit Context through Conclusion, with footnotes, p. 416-449

    Hobby Lobby should be read narrowly as a balancing case, rather than as an autonomy case for several reasons. First, the Court's decision is rooted in the assumption that employees will not be affected at all by the RFRA ex- emption. (209) In clear contrast, autonomy-based exemptions ignore the disadvantages that befall persons and groups left without legal protections. Second, Hobby Lobby makes no suggestion that employees have consented, even impliedly, to be governed by the faith of the corporate owners. In clear contrast, autonomy principles apply in very specific contexts of church membership and mission and in the delivery of many types of services through nonprofit organizations. (210) Autonomy is, at its heart, a consent-based concept; even where consent is attenuated or lacking--as in the case of nonprofit delivery of some kinds of services--the support for numerous diverse non-state actors in civil society is ultimately intended to promote consent by fostering multiple alternatives. (211)

    The jurisprudence of for-profit religion over the last fifty years, though admittedly sparse, suggests a clear demarcation between churches and religious nonprofits, on the one hand, and for-profit activities on the other. (212) Balancing has always been the prevailing approach in the for-profit context. (213) Courts have resisted making connections between for-profit claimants and their religious communities, even where it would have been plausible to do so. (214) Courts have been unwilling

    to pull commercial enterprises into the religious sphere or to link them to the jurisgenerative function of religious communities and have denied recognizing any jurisgenerative function of their own. (215) Put bluntly, businesses are not churches.

    Now that the Court has explicitly held that for-profit entities are capable of exercising religion, free exercise claims from closely-held, secular businesses owned and operated by people with religious convictions will likely surface. As for this class of claimants, an explicit autonomy argument is difficult to make; courts may more easily stay within the Hobby Lobby balancing framework. But religious for-profits--a potentially large class of entities - could make a plausible claim for the categorical protections offered by the autonomy doctrine. Religious for-profits, which provide religious goods and services or provide educational, health care and social services traditionally within the domain of nonprofits, are free-standing religious institutions rather than simply extensions of family businesses. In some instances, they function in the same markets alongside religious nonprofits. (216) These entities are made all the more possible by new corporate forms that facilitate combinations of charitable and religious mission alongside profit-making. (217) But despite the changes in corporate law that blur the traditional divide between nonprofits and for-profits, the religious for-profit is not capable of meeting the jurisdictional and jurisgenerative prerequisites for autonomy protection. Further, the harms to persons and groups that accompany autonomy exemptions would multiply in number and intensity if an entire class of market actors, wielding economic power over access to goods, services and jobs, were permitted to act without regard to those they employ and serve. And, finally, once the doctrine is expanded, protection will likely become diluted across the board. Churches and those religious nonprofits that warrant autonomy protection will see the doctrine eroded even in its core application. Courts must recognize that for all these reasons, the autonomy doctrine should not be extended to for-profits.

    1. The Blurring of Lines Between Nonprofit and For-Profit Entities

      The autonomy jurisprudence has developed in the context of nonprofit institutions. For centuries, churches and religiously affiliated educational, healthcare and charitable institutions have been the backbone of what is now called the nonprofit sector. (218) Because of society's heavy dependence on these institutions, their independence and protection came to be concretized in law. (219) Indeed, traditionally there has been a comfortable fit between the nonprofit corporate form as an indicator of religiosity, and the for-profit form as an indicator of secularity. As Justice Brennan noted in Amos:

      The fact that an operation is not organized as a profit-making commercial enterprise makes colorable a claim that it is not purely secular in orientation.... [U]nlike for-profit corporations, nonprofits historically have been organized specifically to provide certain community services, not simply engage in commerce. Churches often regard the provision of such [nonprofit] services as a means of fulfilling religious duty and of providing an example of the way of life a church seeks to foster. (220) Both Justice Brennan and Justice O'Connor, in Amos concurrences, gave nonprofit organizations and activities a presumptive connection to religious mission. Justice Brennan noted that autonomy-based exemptions allowing religious-based employment discrimination for nonprofits "is particularly appropriate for such entities, because claims that they possess a religious dimension will be especially colorable." (221) And Justice O'Connor, expressing the traditional skepticism toward coupling profit motive with religiosity, noted, "It is not clear ... that activities conducted by religious organizations solely as profit-making enterprises will be as likely to be directly involved in the religious mission of the organization."" (222) Although Justice Brennan was willing to speculate that a religious nonprofit could be eligible for autonomy-based exemptions for some type of for-profit activity that had a "religious character," (223) no case law had developed that concept. In fact, a few years after Amos, when the Court of Appeals for the Second Circuit evaluated a claim by a church that wanted to demolish one of its historic buildings to construct a forty-seven-story commercial office tower, the court denied an exemption from historic preservation regulations--even though the revenues earned from this venture would have been used for ministry. (224)

      Developments in corporate law, however, have resulted in a blurring of lines between nonprofits and for-profits. Many religious nonprofits are "commercial" nonprofits. (225) For instance, religiously affiliated hospitals and universities provide services to the public in exchange for money; they operate within markets in which they compete with secular nonprofits and for-profits. (226) 227 In fact, many nonprofits do earn profits; rather than distribute them to shareholders, they are required to reinvest them in the corporation or spend them to advance the corporation's purpose. (227)

      Even more significant are changes within the for-profit sector. The movement for corporate social responsibility (initiated largely by religious activists in the 1970s) has succeeded in getting many entities to embrace communitarian values in addition to, and even at the expense of, profit-making. (228) Many corporations have become leaders in advocating for a diverse workforce, paying just wages and benefits beyond legal minimums, and supporting social and charitable causes. (229) And while charitable works are still usually pursued through the nonprofit corporate form, a for-profit corporation is free to have a mission traditionally associated with non-profits. Google's establishment of the first "for-profit charity" provides a clear illustration of how for-profit and nonprofit categories have become increasingly interconnected. (230)

      The Court mentioned these trends in Hobby Lobby. Responding to the statements of some federal courts that said for-profit corporations could not exercise religion because they were solely concerned with making money, Justice Alito wrote:

      [M]odern 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.... In fact, recognizing the inherent compatibility between establishing a for-profit corporation and pursuing nonprofit goals, States have increasingly adopted laws formally recognizing hybrid corporate forms. Over half of the States, for instance, now recognize the "benefit corporation," a dual-purpose entity that seeks to achieve both a benefit for the public and a profit for its owners. (231) From this, Justice Alito extrapolated a principle: if for-profits can pursue nonprofit goals, "there is no apparent reason why they may not further religious objectives as well." (232) And indeed, long before the concept of the benefit corporation was introduced, some for-profit corporations have embraced an explicitly religious message. (233) Hobby Lobby's corporate documents commit it to operate in accordance with "Biblical Principles," which means that all 500 of its arts and crafts stores are closed on Sundays, at great financial cost to its owners; it does not engage in transactions that promote alcohol; it proselytizes through newspaper ads; and it contributes generously to Christian ministries. (234) As Professor Lyman Johnson noted, "[F]aith and spiritual values have influenced" even large companies, with a "leavening effect that a focus on non-economic values can have in a corporate culture." (235) And like nonprofits, for-profits with goals beyond profit can function as mediating institutions between the individual and the state in civil society. (236)

    2. The Use of Balancing in For-Profit Religion Jurisprudence

      Given the blurring of lines between the nonprofit and for-profit sectors, partnered with the Court's explicit...

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