Does big business have a stake in religious freedom fights?

Trust Gov. Terry McAuliffe to see a selling opportunity in a raging debate over religious freedom laws.

After Republican Indiana Gov. Mike Pence signed such a law in March, he faced an immediate backlash. Critics ranging from the CEO of Apple to the head of the NCAA questioned whether the law was a license to discriminate against gays and lesbians.

Some detractors were major Indiana businesses, including pharmaceutical giant Eli Lilly and Co. and engine manufacturer Cummins Inc. Indianapolis-based Angie’s List, an online consumer ratings company, called off an expansion that would have created 1,000 jobs.

Ever the salesman, McAuliffe made his pitch. In an open letter to Indiana business executives, the governor invited them to “take advantage of Virginia’s open, inclusive and thriving business environment.”

“So if recent events have led you to re-evaluate your business relationship with your current home state,” McAuliffe wrote, “I hope you will visit YesVirginia.org and contact me personally about the opportunities our commonwealth can offer.”

In his letter, the governor noted that his first act after taking office last year was an executive order protecting state employees from discrimination based on race, gender, religion and sexual orientation.

He didn’t reveal, however, that Virginia has its own religious freedom law, an omission quickly pointed out by conservative Republican Del. Bob Marshall. In a letter to the Indianapolis Star, Marshall said, “Virginia has the same law. We passed it in 2007. The sky did not fall!”

In fact, Virginia is one of 19 states that have passed religious freedom laws, which attracted little notice until last year.

Pence initially defended the Indiana law but backtracked in the continuing onslaught of criticism. Saying the legislation was misunderstood, the governor asked the Indiana legislature to pass a new bill clarifying that the first one could not be used to discriminate against gays and lesbians. (Arkansas Gov. Asa Hutchinson, also a Republican, backed down on a similar bill after coming under fire from Wal-Mart, which is based in Bentonville, Ark.)

Oddly enough, the authors of the original federal law, the Religious Freedom Restoration Act of 1993 (RFRA), were not conservative Republicans but liberal Democrats — Rep. Charles Schumer of New York (now a senator who is expected to become Senate minority leader) and the late Sen. Edward Kennedy of Massachusetts. The bill was approved by a unanimous vote in the House and received only three dissenting votes in the Senate.  President Bill Clinton signed it into law.

RFRA has nothing to do with same-sex marriage. While the federal law applies to all religions, its original focus was protecting the religious rights of American Indians.  The legislation was a reaction to a 1990 Supreme Court ruling upholding Oregon’s decision to deny unemployment benefits to two American Indians. They had been fired from their jobs in a rehab clinic for using peyote in religious rituals.

RFRA, however, doesn’t guarantee that people who think their religious rights have been trampled will always win.  They have to prove that actions by the government impinge on fervently held religious beliefs.  The government, on the other hand, has to show it had a compelling reason for failing to respect religious rights in pursuit of the public’s interest. State laws began popping up after 1997 when the Supreme Court ruled that RFRA applied only to the federal government.

So why are these state laws now so controversial? The answer appears to lie in three recent Supreme Court decisions.

Two rulings, announced at the same time in 2013, struck down the federal Defense of Marriage Act and allowed same-sex marriages to resume in California. The decisions did not address state bans on same-sex marriage, but they opened a door through which challenges to those laws poured through.  A series of federal court rulings struck down these laws like bowling pins, raising the number of states in which same-sex marriage is legal to 37.

The third Supreme Court decision, issued last June, involved Oklahoma City-based Hobby Lobby. The crafts retailer objected to Obamacare requirements that its employee health insurance cover birth control. The company’s owners oppose the use of certain contraceptives on religious grounds. The court ruled that closely held corporations can assert religious rights.

The Hobby Lobby decision appeared to raise the possibility that, under state RFRA laws, small business owners opposed to same-sex marriage might find legal refuge.
So why are big corporations upset by laws that, its supporters hope, would protect a conservative Christian baker who refuses to prepare a wedding cake for a gay couple?
First of all, I think many business leaders who have criticized the original Indiana and Arkansas laws genuinely believe they were discriminatory, representing a step backward in the evolution of an inclusive American culture.

Secondly, they likely feared the damage these laws would cause to recruitment efforts for top talent.  Businesses compete for key employees just as they compete for customers. That competition is much tougher if your home state has a stigma. This is especially true in recruiting young professionals, many of whom see the fight for same-sex marriage as the civil rights crusade of their era.

If nothing else, the Indiana donnybrook shows the collective political power big businesses have when they believe that a bad decision must be reversed. We can only hope they pick their fights wisely.