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Businesses and Religious Freedom

12. How does freedom of religion affect business practice?

Generally, for-profit businesses covered by Title VII of the Civil Rights Act of 1964 may not discriminate against employees on the basis of religion. There is an exception for religious organizations whose primary purpose necessitates religious practice or affiliation among its employees. Aside from the prohibitions on employment practices, common law holds that closely-held corporations may have religious protections similar to those of citizens.

•    Note: This issue came to the forefront of consideration in the case, Burwell v. Hobby Lobby Stores, Inc., The Court found that the religious beliefs of owners of the closely-held entity were sufficiently tied to the religious beliefs of the owners to be susceptible to protection under the 1st Amendment. The court’s holding exempts closely-held businesses from laws that mandate or prohibit certain conduct conflicting with that belief.

•    Example: ABC, LLC is a small restaurant with 25 employees. ABC is solely owned by a family of devout Christians. ABC refuses to hire any employees who are not Christian. Further, ABC refuses to offer a health insurance plan than covers subscriptions for birth control. ABC’s failure to hire non-Christians may constitute illegal discrimination. The common law, however, allows a closely-held business entity to adopt the religious beliefs of its owners. As such, refusing to sponsor a health insurance plan that contains provisions conflicting with the owner’s religious beliefs is likely legal. This example demonstrates the fine line between business practices that discriminate against others based upon religious belief with practices that cause a business to violate its own beliefs.

•    Discussion: Why do you think the government makes an exception to the employment discrimination laws allowing religious organizations to discriminate? What is your view of the holding in the Hobby Lobby case that a business entity can adopt (and enforce) the religious rights of its owners?

•    Practice Question: John is the sole owner of Outdoor, LLC, a hunting and fishing store. Outdoor is located in a town that has an ordinance requiring all downtown shops to be open on weekends for customer shopping. The ordinance is part of an economic revitalization effort in the town. John has 15 employees in his shop. He observes fundamental Christian beliefs. He refuses to open his shop on Sundays in observance of his beliefs. He also refuses to hire any women employees because he believes that women should not work and should be subservient and remain in the homes of their fathers or husbands. Are there any legal issues with John refusing to open on Sundays or refusing to hire women?

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