I offer the following “Op-Ed” for BBers to consider, comment and critique;
The recent decision by the Supreme Court that allows businesses to be exempt from parts of the ACA based on their owners’ religious beliefs has left a lot of people wondering what the implications are for the future; will the businesses be allowed to restrict other employee choices? What other laws might they be exempt from? What are considered legitimate religious practices and what are not? How can we know which businesses are legitimately formed around strongly held religious beliefs, and which are just using the law to exempt themselves from onerous regulation?
Addressing these questions through national legislation (e.g. amending the RFRA) in the current political environment, seems impossible. But one state-based solution does present itself; the establishment of a new kind of business registration specifically for closely held companies intending to run themselves according to specific religious principles. Similar to the benefit corporation laws passed by almost 30 states, the “R-Corp” standard could reduce the confusion around some of these issues, and ultimately lead to a higher standard of ethical business, as well as bringing full transparency around the religious practices of the business to employees, customers and business partners.
So what would this R-Corp look like? First, it would be limited to closely held businesses as defined by a state law and in alignment with the Hobby Lobby decision. Second, it would require that companies declare their intent to do business according to religious principles from the beginning, and set-out which religious beliefs they adhere to as part of their by-laws or business charter. Finally, it would include a requirement that the business submit to a third party faith-based nonprofit auditor of its business practices to ensure they are complying with their charter.
By setting up a system for R-Corp registrations, people interacting with those businesses would be better able to know how the business operates with regards to their beliefs; some customers or employees may be drawn to businesses that adhere to their own beliefs, others may choose not to do business with them because of those ideas. But transparency is the goal, so that everyone has a choice about whether and how they do business with a company that is based around religious practices. From the standpoint of enforcement, an R-Corp statute would give states a better understanding of who is organized under religious principles and distinguish them from those who might just claim an exemption as a way to avoid complying with the law. Finally, an R-Corp standard would ensure that businesses that claim a religious exemption adhere not just those religious practices that are convenient, but all applicable practices, and thereby become more ethical overall.