I. The Corporate Veil issue
Normally, a corporation is an independent entity, separate and distinct from its owners. This has been recognized for (literally) centuries as the point of creating a corporation. [By the way, corporations are a fairly recent form of business, dating back only to the middle of the 17th Century and are solely and completely the creation of the State.] Normally, if the corporation fails and/or goes bankrupt its debtors cannot collect from the owners they are protected by the “corporate veil” over the business. That’s the whole point of the corporate form of doing business.
But, and there is a big BUT here, it is possible on some occasions to pierce the “corporate veil.” I won’t go into all the different ways it can be done, but the key principle is that the “corporation” is seen as just another arm of the owners, that the owners did not maintain a proper distinction between corporate interests (usually financial but not always) and their personal interests.
Now, after Hobby Lobby, there is a fissure in the corporate veil. Closely held corporations and others attempting to take advantage of Hobby Lobby would do well to consider whether they are leaving themselves open to having their corporate veil pierced and becoming personally liable for all the debts of the corporation.
I predict serious litigation over this issue because it has not been addressed yet.
II. The religious issue
I don’t want to diminish anybody’s personal faith. But one thing about the Hobby Lobby take on religion bothers me. If I understand the beliefs of the Hobby Lobby owners, they are saying that not only are they personally forbidden from taking any steps or actions that might sin or lead to sin, they are forbidden to take any steps, even remote ones like buying insurance, which could lead other people to sin. This applies even more explicitly in Wheaton College, where the Supreme Court just granted the college an injunction last Thursday. (Wheaton College has announced that it cannot sign the government form affirming its religious beliefs so that a 3rd party insurer can step forward. The gravamen of Wheaton’s objection is that signing the form enables others to take actions Wheaton believes are sinful and therefore is equivalent to Wheaton sinning.)
Ummm. I think I have a problem with this. You see, I believe that I am the sole caretaker of myself. I neither want to permit others to determine what “sin” is for me and do not accept others’ definition of “sin.” Thus, I do not permit Orthodox Jews to tell me when I can or cannot drive. They believe it is a sin for them to drive on the Sabbath but they cannot stop me. If they see me walking to my car carrying my car keys, obviously intent on driving on the Sabbath, and try to stop me (so that they do not enable my sin) by, say, taking away my car keys I am entitled to, and will, resist. The “butterfly effect” of sin ought not be extended and empowered by the law—it can never end.
Now, let’s extend the Hobby Lobby and Wheaton College logic to something beyond health care. I sincerely believe that unmarried men and unmarried women should never be alone together in the same room. It is a sin and could lead to mortal sin, i.e., touching and moral corruption (sex). So, in the corporation I own and control, I do not permit my employees of the opposite sex to take their breaks in the same lunch room or to use any joint facility. I even insist that they enter through different doors so there is no accidental touching. In furtherance of my religious beliefs, I create separate but equal facilities for both sexes and strictly enforce their separation.
Is this discrimination? If so, do I get an exemption from the law because of my heartfelt belief which I am implementing through my corporation? What gives me, the owner of the corporation, to control my employees to the extent that I dictate who they may not sit with, not eat with, not socialize with? Where are the employees’ rights? Why do my religious rights as employer trump my employees’ rights? Remember, this is a corporationbusiness, not my private home or a church.
By the way, although I am not a religious man, I understand that most religions believe that humans have free will and the right of an individual to make mistakes. How does that right square with the “butterfly effect” of my obligation not to enable you to sin?
I predict that there will be more litigation over this issue too.