Health and Science

What's really surprising about the Hobby Lobby decision

Dan Eaton, partner at Seltzer Caplan McMahon Vitek and professor at San Diego State University

The remarkable thing about the Supreme Court's ruling in the Hobby Lobby case is that so many people consider a closely-held company's right to operate their business in accordance with their religious beliefs remarkable. 

That becomes clear when we focus on the two uncontroversial underlying truisms rather than the explosive policy issue at the center of the Hobby Lobby action.

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First, the choice of people to organize themselves as a for-profit corporation to obtain the benefits the law extends to corporations, such as limited liability, does not rend the humanity out of the genesis or operation of the enterprise.

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As Justice Samuel Alito put it in his majority opinion in the Hobby Lobby case:  "A corporation is simply a form of organization used by human beings to achieve desired ends.  An established body of law specifies the rights and obligations of the people (including shareholders, officers, and employees) who are associated with the corporation in one way or another.  When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of these people."  

Second, a company consequently reflects the values of the people that control it. Those values may be found in a mission statement, company policies, or simply wordlessly in the way the company chooses to do business.  All for-profit companies by definition include among their values the pursuit of profit.  But that is virtually never the sole value of a company and even where it is, that itself reflects a fundamentally human choice. 

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Most companies embrace a broader set of values, such as the commitment to environmentally-friendly practices (Clorox's Green Works line of cleaning products) or worker-friendly policies (Starbucks) or customer-centered operations (Amazon). Sometimes corporate values appeal to yet a higher authority. Box, an online file-storage company for businesses, lists among its core values: "Make Mom proud. (Unless she's evil.)"  And some companies obtain state or private certification that commits them explicitly to subordinating the profit motive (Patagonia).

What the Hobby Lobby ruling means for the rest of us
What the Hobby Lobby ruling means for the rest of us

No one would question the right of these large companies to integrate these value choices in the way they do business.  Why is it so unfathomable that owners of companies, particularly the roughly 90 percent of for-profit companies that are closely held in a few hands, have a statutory right to exercise religious values in the way they do business that the government also cannot unduly burden?  

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Justice Anthony Kennedy pointed out in his concurring opinion that free exercise of religion means more than the free exercise of religious belief. Free exercise also means "the right to express those beliefs and to establish one's religious (or nonreligious) self-definition in the political, civic, and economic life of our larger community."  Those beliefs may influence our choices as employees of businesses, investors in businesses, consumers of businesses, and yes, owners of businesses.  

The law properly steps in to prohibit those who control businesses from engaging in bigotry and to require those in control to respect and accommodate religious differences.  Beyond that, the government must respect the operational decisions business owners make as a matter of discernible religious conscience.

Commentary by Dan Eaton, a partner with the San Diego law firm of Seltzer Caplan McMahon Vitek where his practice focuses on defending and advising employers.  He also is a professor at the San Diego State University College of Business Administration where he teaches classes in business ethics and employment law. Follow him on Twitter @DanEatonlaw.