One Corporation, Under Law, Indivisible

The Supreme Court dismisses collective rights, except when it comes to corporations.

Editorial cartoon on Hobby Lobby ruling
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Most every year, the U.S. Supreme Court issues one ruling – usually just before the Fourth of July break – with deep implications for understanding our nation and our times. Last week’s Hobby Lobby decision appears to be this year’s national Rorschach test, with each American seeing in it a reflection of his or her own concerns about contraception, sex, the status of women or religious freedom. Many, however, especially on the left, have been struck by the court’s embrace of Mitt Romney’s proposition that “corporations are people, too, my friend,” and not surprisingly view that as the main import of the decision.

As discussed in a previous post, while the case involved contraception, religion and corporations, what it was “really” about in my view was undermining the reach of the federal commerce power, the main focus of conservative jurisprudence for the last four decades. Certainly, a major impetus for this is the rollback of the 20th century regulatory state, which largely impinges upon big business – but the human rights of corporations as outlined by the court on June 30 are striking for deeper reasons than that.

Right or wrong, it’s simply not news that corporations are persons (if not “people”) for legal purposes. The whole point of the corporation – a legal artifice that goes back several hundred years to the birth of modern capitalism – was to create an entity that could act individually for, but separate from, a number of different investors, buying, selling, owning and executing contracts on its own, just like a person.

[READ: Leave the Bosses Out of It]

The basic question raised from a constitutional perspective was whether these artificial “persons” also had the same personal rights as we real people under the Bill of Rights. This presents itself most often in questions of whether corporations have criminal rights against self-incrimination, unreasonable search and seizure, excessive punishment and access to due process, as well as free speech rights. The courts have long held that corporations have the same rights as humans in these areas, essentially on the same theory as in Hobby Lobby – not that they’re people, but that protecting their rights is necessary to protect the underlying rights of the people who actually compose them. So, despite how jarring it may be to hear talk of corporations’ religious beliefs, there really isn’t much in Hobby Lobby that’s novel in that regard.

What’s actually more jarring is to compare Hobby Lobby’s treatment of individual versus corporate entities with the same majority’s ruling earlier the very same day in Harris v. Quinn. In that case, the court continued – and laid the groundwork for eventual completion – its drive to destroy unions under the guise of the First Amendment. In union cases like Harris, the current court has consistently found that employees have First Amendment free speech rights that trump the union’s.

So let’s try this thought experiment: Let’s say that unions finally take the hint from all this that, as I’ve argued, they should ditch the whole notion of a “union” and instead think of themselves as labor supply businesses, not all that different from Manpower, Inc. (except interested in boosting workers’ incomes, not simply boosting the income of labor as an input owned by just another business).

[MORE: Cartoons on the Catholic Contraception Controversy]

I and four family members form Hobby Workers, Inc., specializing in finding and training the best possible workers for hobby stores, and get so good at it that these stores contract with us exclusively to meet all their employment needs. Aspiring hobby store workers, meanwhile, sign similar exclusive contracts with us, because we control access to all the jobs at these particular stores, just like a “closed shop,” except we’re a business corporation instead of a union. Our company then takes a portion of the fees we charge these workers for training them and getting them these great hobby store jobs and uses it to finance our lobbying on behalf of our corporate activities and build a get-out-the-vote organization for Mitt Romney. Would these workers have any First Amendment right to object to our use of profits derived from them for political purposes of which they don’t approve? Of course not – even though there is no functional difference between this scenario and that in the union dues cases, except for one: We’re legally organized as Hobby Workers, Inc., instead of as the Hobby Workers International.

Meanwhile, inside our own corporation’s ownership team, let’s say we have one dissenter – a misguided liberal who objects to corporate profits being used to fund corporate lobbying and field organizing for Romney. Does she have a First Amendment right that her share (one-fifth) of the spending for political purposes be withheld? For that matter, do any of us who own stock in any corporation have a First Amendment right to veto a pro-rata share of the corporation’s political spending? We all know the answer is no.

So let’s summarize the state of the law: If you’re an individual within a corporate framework – whether as an investor or as a worker – you have no claim to constitutional rights vis-à-vis the corporate entity, even though, just as with unions, the entity is entirely a legal construct of the government. But if you’re an individual within some other collective entity, such as a government itself or a union, your rights are paramount – as, too, if you’re a corporation (and, yes, you could be a corporation who’s reading this because corporations are people, remember).

[READ: What Hobby Lobby Says About Faith vs. Race]

In sum, we have a schizophrenic approach to collectives. The American psyche has always been one of rugged individualism, we are told, while anything that involves people banding together collectively smacks of communism. Except, of course, the joint stock corporation – the collectivity without which modern capitalism wouldn’t even exist.

The distinction is intellectually incoherent, but, in terms of crude exercise of political and economic power, crucial. In incorporating it, so to speak, as central to its jurisprudence, the Supreme Court is eschewing intellectual integrity for a particular vision of raw power. We expect it – and the very justices responsible claim – to pursue exactly the opposite, however.