Thursday, January 30, 2020

Religious Sincerity in Corporations

California Western's Catherine Hardee, recently posted her paper Schrodinger's Corporation: The Paradox of Religious Sincerity in Heterogeneous Corporations to SSRN.  It's a fascinating piece and has already been featured on Ipse Dixit if you're curious about a podcast version.

Her abstract sets the key problem out well:

Consider a corporation where one group of shareholders holds sincere religious beliefs and another group of shareholders does not share those beliefs but, for a price, will allow the religious shareholders to request a religious exemption to a neutrally applicable law on behalf of the corporation.  The corporation is potentially both religiously sincere and insincere at the same time. A claim by the corporation for a religious accommodation requires the court to solve the paradox created by this duality and declare the corporation, as a whole, either sincere or insincere in its beliefs. While the Supreme Court and scholars have noted some of the particular issues raised when determining the religious sincerity of shareholders’ claims, to date no one has engaged systematically with the question of whose religious sincerity should be attributed to the corporation when shareholders hold heterogeneous, or diverse, religious beliefs.

One possible solution to the problem might be to allow ordinary private ordering to address the issue.  The board could designate one share class with the right to control the corporation's religious beliefs about birth control.  So long as the holder of those shares sincerely held the belief, it could settle the question of what religious view to attribute to the corporation.

Hardee takes a hard look at this commodification of religious sincerity and explores how it could harm religious freedom generally.  She creates a framework for considering how to resolve these questions and cautions against using contracts to barter for religious exemptions.

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