The US Supreme Court recently passed its decision in the case concerning the rights of three companies: Hobby Lobby, Conestoga Wood, and Mardel to withdraw from a provision in Obamacare that would require their group health plans to furnish “preventive care and screenings” for women. The decision is of interest from a religious perspective because it speaks to the legal view of religious rights concerning abortifacients, but in this post, I want to look at the issue of the court’s view on the personhood of corporations.
The majority decision rested primarily on the understanding of The Religious Freedom Restoration Act of 1993 (RFRA), which prohibits the “Government [from] substantially burden[ing] a person’s exercise of religion even if the burden results from a rule of general applicability.” The three corporations that are involved in this suit are closely held, for-profit corporations. The owners of the companies believe that access to contraceptive drugs or devices after conception would violate their religious views. While the owners of the companies are Christians, the question is whether the companies they own can also hold religious views.
“Nothing in the RFRA suggests a congressional intent to depart from the Dictionary Act definition of ‘person,’ which ‘include[s] corporations, … as well as individuals.'” [1 U. S. C. §1.] Health and Human Services (HHS) had already conceded that nonprofit corporations can be “persons” under RFRA, but they argued that this does not extend to for-profit corporations because these companies cannot “exercise… religion.”
The court determined however, that the HHS contraceptive mandate burdens the exercise of religion by the companies because it’s burdens the same exercise by their owners. The Hahns and Greens would be required to engage in conduct that violates their religious beliefs. By organizing their businesses as corporations, they did not forfeit their RFRA protection.
HHS argued that nonprofit corporations were special because furthering their corporate religious freedom “furthers individual religious freedom.” The court however, ruled that if HHS conceded that nonprofit corporations could be protected by RFRA, the must also concede the same right for-profit corporations.
All of the companies are closely-held, family companies with specific company missions that explicitly include operating by biblical or Christian principles. The court concluded that Congress provided protection for people like the Hahns and Greens through the corporation, which is a legal fiction created to provide protection for human beings.
A “corporation is simply a form of organization used by human beings to achieve desired ends.” The rights of the corporation are extended to protect the rights of the people associated with it in one way or another, including shareholders, officers, and employees. The court deemed that corporations can do nothing apart from the human beings who own, run, and are employed by them.
Corporate law in the various jurisdictions in America authorizes (implicitly or explicitly) corporations to be formed “for any lawful purpose or business.” [1 J. Cox & T. Hazen, Treatise of the Law of Corporations §4:1, p. 224 (3d ed. 2010)] The court determined that:
While it is certainly true that a central objective of for-profit corporations is to make money, 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. … If for-profit corporations may pursue such worthy objectives, there is no apparent reason why they may not further religious objectives as well. … Not all corporations that decline to organize as nonprofits do so in order to maximize profit. For example, organizations with religious and charitable aims might organize as for-profit corporations because of the potential advantages of that corporate form, such as the freedom to participate in lobbying for legislation or campaigning for political candidates who promote their religious or charitable goals.
The US Supreme Court decision in HHS v. Hobby Lobby et al is an important victory for the protection of religious freedom in the United States. It is also important because, while recognizing for-profit companies as ‘persons’, the Court also recognizes that they are nothing more than legal fictions that are created to reflect and protect the rights and aims of those associated with them. Companies may have a pure profit-motive, but they are also free to pursue other objectives, religious and non-religious.
