Document Type
Article
Publication Title
South Carolina Law Review
Publication Date
2024
Abstract
While the Supreme Court has extended many constitutional privileges to business corporations, it has not held that they have a full constitutionally protected right to practice religion comparable to that of citizens. Employment Division v. Smith long served as a barrier to Free Exercise claims for special exceptions to neutral and generally applicable laws. But as the Court moves away from Smith, the issue of corporate Free Exercise rights must be confronted. The freedom of religion is a critically important individual right in a free country. But individual rights often conflict with collective religious practice; religious freedom is the opposite of establishment of religion. We constrain governmental religious practices in order to maintain space for individual consciences. The issue raised by the collapse of Smith is whether judicial protection of business corporations' religious practices creates new spaces for individual freedom, or is more like state establishment, imposing one group's religion on others regardless of their own traditions or views. The Preamble to the Constitution invokes "We the People," not "We the Persons." Neither the text, structure, nor function of the Constitution supports judicial protection of business corporations' religious practices. Corporate law is designed to allow corporate directors and managers to coordinate economic activity in changing markets. Accordingly, ordinary corporate boards operate the firm without the consent of shareholders or employees. If a corporation adopts a religious stance to determine a corporation's religion, they effectively impose an establishment on corporate participants. Granting such entities religious 'freedom" could upend First Amendment jurisprudence and profoundly reduce freedom for the American people. Under American law, business corporations are directed and managed by fiduciaries required to act in the interests of the corporate entity itself, which is often interpreted to be pursuing profit. Unfortunately, sometimes externalizing costs, avoiding regulations, or other anti-social actions can be routes to profit. If the Supreme Court post-Smith grants special exemptions from generally applicable law, corporate fiduciaries will be under intense financial pressure to argue for religious exemptions to market regulations, including labor laws, consumer or environmental protection regulations, and anti-discrimination laws if an exemption might provide a competitive advantage. Indeed, officers may conclude fiduciary duties require these arguments, whether or not they reflect sincere personal religious beliefs. Conversely, corporate officers may feel religious obligations to violate their duties owed to the corporation, potentially imposing personal beliefs on employees, investors, and consumers to the detriment of economy and religion alike.
Recommended Citation
Daniel J.H. Greenwood and Nicholas E. Tramposch,
After Smith Falls: Corporate Free Exercise Lochnerism, 76 S.C. L. Rev. 287
(2024)
Available at: https://scholarlycommons.law.hofstra.edu/faculty_scholarship/1667