The U.S. Supreme Court decision in Burwell v. Hobby Lobby Stores, 573 U.S. 22 (2014) addressed the question of whether the Religious Freedom Restoration Act (RFRA) 42 U.S.C. Sect. 2000bb-1(a),(b) can be applied to closely held corporations whose owners have sincerely held religious beliefs.1 RFRA prohibits the government from substantially burdening a person’s exercise of religion unless the government demonstrates that the application of the burden to that person is in furtherance of a compelling governmental interest and is the least restrictive means of furthering that compelling governmental interest.
By holding that the owners of closely held corporations may apply RFRA protections of free-exercise rights to the closely held corporations they own and thus protect “the religious liberty of those who own and control” the closely held corporations, the court has permitted creditors of those closely held corporations to pierce the corporation’s corporate veil. Prior to Hobby Lobby, the corporate veil had limited creditors to inquiries about financial matters in determining whether the closely held corporation is the “alter ego” of the owners; now creditors can inquire whether the owners’ religious beliefs have been imposed on the corporation.
Religious Freedom Act
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