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Supreme Court to Decide Whether Businesses Have Religion


The Supreme Court this week will hear arguments over whether companies really do have a soul.

On Tuesday, the court will hear arguments over two cases involving the mandate to provide contraceptive coverage under Obamacare. Two companies – retailers Hobby Lobby and Conestoga Wood Specialties – sued to say the mandate went contrary to the faith of their companies' owners and cultures. In lower courts, Hobby Lobby won, while Conestoga lost.

Back in 2011 on the campaign trail, Mitt Romney took heat for saying corporations were people, too, but, despite the derision, he has law on his side. The issue is the idea of “corporate personhood.” The law can treat companies like people, which endows them with some Constitutional rights. The biggest case in that regard came in the famous Citizens Union decision from the Supreme Court in 2010, which said companies could spend what they wanted on political campaigns, because curtailing that would violate companies' First Amendment rights to free speech.

The First Amendment doesn't just cover free speech, but also freedom of religion (as well as free press, assembly and filing grievances with the government). So, if companies have a First Amendment right for speech, shouldn't they have the same right to religious expression?

There is another legal issue at work. The contraception mandate may violate the Religious Freedom Restoration Act of 1993, a Clinton-era law that says the U.S. can't substantially burden a person’s free exercise of religion. If a company is a person, does the mandate burden a company's free exercise of religious values?

Related: Why Faith Belongs In Your Workplace

That is all what the court will decide, following Tuesday's arguments. Any decision will have broad implications for independent business, which are often run based on the values of their founders. Hobby Lobby is a great example. The retailer has made Christian values so strong at the company that the stores are closed on Sunday and religious music plays for shoppers. The company's founders took their deeply held religious beliefs and made them part of the corporation's culture. Personal and corporate values became one. Some even argue that faith belongs in the workplace, and just makes good business sense.

The trickiest issue for the Court, as always, is balancing the rights of some individuals against others. For example, should employees of Hobby Lobby be denied a benefit others have simply because they work for founders who exercise their beliefs on a corporate level?

But there is also the matter of individual choice. If the Court says a company like Hobby Lobby can exercise its religious freedoms, employees can exercise their freedoms and go work somewhere else. Customers, too, can exercise their freedoms, choosing to shop at Hobby Lobby or not.

Even if Hobby Lobby and Conestoga lose, they have options, too. They can choose to pay the Obamacare penalty and not directly offer health care to their employees.

Related: Preaching the Morality of Capitalism


Ray Hennessey

Written By

Ray Hennessey is the former editorial director of Entrepreneur.