• Religious Freedom Restoration Act

Religious Freedom and Free Markets: Implications for Businesses

by Noel Bagwell
for Executive Legal Professionals, PLLC

April 3, 2015

Recent Developments in Religious Freedom Protection in the U.S.

Indiana’s General Assembly recently passed a state law, the Religious Freedom Restoration Act (“RFRA”), which has received a great deal of scrutiny. Across the United States, various groups have criticized and supported the law for a diverse array of reasons. This article addresses implications the RFRA has for those who own their own businesses, or who regularly make business decisions on behalf of the businesses for which they work. Because such individuals have an especially intense need to understand the implications laws like the RFRA have on the way their business’s policies affect their employees and customers, Executive Legal Professionals wants to contribute in a positive, productive, and constructive way to the national conversation about the RFRA and similar laws which may be enacted in the future.

Jacob Gershman, lead writer for the WSJ.com Law Blog

Jacob Gershman,
lead writer
for the WSJ.com
Law Blog

Writing for the Wall Street Journal’s blog, Jacob Gershman, summarizes the RFRA in the following way:


[Religious Freedom Restoration Act] is modeled after the federal Religious Freedom Restoration Act, a 1993 law that sets a high legal bar for when the government may ‘substantially burden’ an individual’s exercise of religions. Indiana is among 20 states that have enacted similar religious freedom measures.

If you wish to read the text of the law, you may read or download it using the tool below.

A Bit of Necessary Historical Background

The Constitution of the United States has always ostensibly guaranteed the natural right to the free exercise of religion; and such guarantees have, to varying degrees, been enforceable at the state level since at least December 20, 1866, when South Carolina ratified the Fourteenth Amendment. Section One of the Fourteenth Amendment reads, in relevant part:

No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

The guarantees and protections of the natural rights of all U.S. citizens (i.e. “privileges and immunities of the citizens of the United States”) were made stronger by Section One of the Fourteenth Amendment, because its language protected citizens from abridgment of their federal Constitutional Rights by the States. Essentially, after the Fourteenth Amendment passed, neither the federal government nor any state could make a law depriving a U.S. citizen of the rights guaranteed and protected by the U.S. Constitution.


Deprivations of religious liberty have occurred, however, in the form of anti-discrimination laws. Laws which forbid businesses to refuse to serve people because they are a member of a protected class can infringe upon both religious and economic liberty, especially when protected classes include people who self-identify as lesbian, gay, bisexual and / or transgender.

The goal [of the Religious Freedom Restoration Act] is to give business owners a stronger legal defense if they refuse to serve lesbian, gay, bisexual and transgender customers and want to cite their faith as justification for their actions. That is why groups representing religious conservatives support it, standing behind Gov. Mike Pence as he signed the bill last weekend. That is also why groups advocating for LGBT rights, along with a slew of corporations and celebrities, have protested the law’s enactment — creating such uproar that Pence said on Tuesday he was open to “clarifying” the legislation. (Cohn, “Why Indiana’s Religious Freedom Law Is Such A Big Deal”, 2015)

Conservatives say “groups advocating for LGBT rights” are not legally entitled to redefine terms like “marriage,” or to force or coerce people people to do business with those with whom they would prefer not to do business, because of the lifestyle choices they have made. Such conservatives, typically, are not persuaded that people who self-identify as lesbian, gay, bisexual and / or transgender do so because of any genetic condition with which they are born, but because they have chosen an “LGBT” lifestyle.

Conservative writers, like Matt Barber, have expressed their belief that “groups advocating for LGBT rights” are not champion a civil rights movement, but are engaging in cultural warfare as part of a Progressive socio-economic and political agenda to “demolish the America of our founding and raise, in its place, a twisted hybrid of San Francisco’s Castro District and Josef Stalin’s Soviet Union,” as Barber puts it.

In their manuscript, ‘After the Ball: How America Will Conquer Its Fear and Hatred of Gays in the ’90s’ (1989, Doubleday/Bantam), Harvard-educated marketing experts Marshall Kirk and Hunter Madsen meticulously laid out the homosexual lobby’s blueprint for success in what is widely regarded as the handbook for the ‘gay’ agenda.

This ambitious project to demolish the America of our founding and raise, in its place, a twisted hybrid of San Francisco’s Castro District and Josef Stalin’s Soviet Union is nearing fruition.

Kirk and Madsen devised an insidious three-pronged approach the homosexual lobby has masterfully implemented in subsequent years: Desensitization, Jamming and Conversion.

They summarized their approach this way:

    • Portray ‘gays’ as victims, not as aggressive challengers.
    • Give potential protectors (‘allies’) a just cause.
    • Make ‘gays’ look good.
    • Make dissenters look bad.

(Barber, “How the ‘Gay’ Jihad Normalized a Filthy Practice”, 2014)

Liberal / Progressive polemicists, on the other hand, argue in favor of the view that people who self-identify as lesbian, gay, bisexual and / or transgender do so because they are born that way. Liberal / Progressive polemicists argue, because being LGBT is not a choice but an in-born condition, therefore, people who self-identify as LGBT should not be subject to discrimination of any kind as a result of a condition with which they were born.

As Rebecca M. Jordan-Young  points out, in her excellent book, Brain Storm: The Flaws in the Science of Sex Differences, there are excellent reasons to question “what we ‘know’ about male and female brains, or gay and straight brains.”

When Simon LeVay reported in 1991 that he had found a difference in brain structure between gay and heterosexual men, which was trumpeted as the discovery of ‘The Gay Brain,’ [Jordan-Young] found it interesting but also puzzling. How could gayness take a single identifiable form in the brain when it takes such varied forms in people’s lives? (Young, Brain storm: the flaws in the science of sex differences, 2011)

Whatever opinion you have about how people come to self-identify as LGBT, there are good, but not perfect, arguments to make in favor of your view. What impact your opinion will have about how you treat others is the real issue, and that is what the rest of this article is about.

Free-markets vs. Discrimination

Free-market capitalists have a simple answer the question of whether or not people are born “LGBT:” WHO CARES?! Everyone’s dollars spend the same! This is one of the many beauties of free-market capitalism: it punishes discrimination and rewards true tolerance of other people, while remaining neutral about others’ ideas, values, lifestyle choices, or inherent qualities. This facet of free-market capitalism works best in the absence of unnecessary regulation and when information costs regarding relevant market conditions are sufficiently low.

One of the most brilliant articles I have read on Entrepreneur Magazine’s website, this year, is an article by Robert Craven, CEO of MegaFood, called “Let’s Be Real: Why Transparency in Business Should Be the Norm.” In that piece, Mr. Craven writes:

The concept of ‘need to know’ has undergone a significant shift in recent years. With the entire universe of information only a click away and social media platforms keeping everyone constantly connected, individuals increasingly feel they need to know — and share — everything.

Whether it’s product reviews, political opinions, innermost thoughts or even a photo of today’s lunch, people are living their lives completely out in the open, laying bare all manner of minutiae online.

This expectation for transparency has extended beyond personal interactions and is now a reality in business. Across all industries, transparency has never been more important to a successful business model. Withholding or cleverly reshaping information is no longer a viable option for this new era of consumers who are savvier than any generation before them and for whom skepticism seems to be a default setting. In order to build brand loyalty, companies need to first build trust. (Craven, “Let’s Be Real: Why Transparency in Business Should Be the Norm”, 2015)

Why has this expectation for transparency become the de facto cultural standard among consumers? In a phrase: the Internet. The Internet is largely comprised of networks connected in a free-market capitalist and democratic ecosystem. When consumers can go online, read reviews, and research your company, they find out all sorts of things which influence their buying behavior. The more information consumers have, the more informed-choices they can make. This is good, because informed choices not only help consumers buy more of the kinds of products they want but also help consumers support companies that reflect their values.

Sufficiently informed consumers can “vote with their dollars” for companies which reflect their values and against companies which do not. The market, then, will reward with financial success companies which most accurately reflect values consonant with culturally accepted social norms; whereas companies which fail to accurately reflect values consonant with culturally accepted social norms will meet with limited success or failure, depending on the degree to which their corporate culture deviates from culturally acceptable social norms.

Companies which develop a culture of transparency will be in a better position to more accurately measure the response to their corporate culture. Building trust between a company and its customers starts with transparency. Your clients want need to know what to expect when they [attempt] to do business with you.

If a business does not want to serve certain kinds or types of people, the law may protect them, but that business will only be able to know whether that is a good or bad business decision if their marketing and corporate culture are transparent about their unwillingness to serve the kinds of people they are unwilling to serve. For every bakery refusing to bake a cake for a couple which self-identifies as LGBT, there is at least one competitor which could bake that cake. Why would anyone want to do business with someone who doesn’t want to do business with them?

In the age of the Internet, what our economy needs is greater transparency, not greater regulation (unless it’s regulation requiring reasonable transparency). When consumers are informed and businesses are transparent, in a free market, the forces of supply and demand will work together to punish discrimination and reward tolerance. In such a system, a law protecting religious freedom, like Indiana’s RFRA, is not a genuine threat to people who self-identify as LGBT or to any other minority group or protected class. The only people to whom such laws are a threat are the people who choose to discriminate against others.

  1. Cohn, J. (2015, April 1). Why Indiana’s Religious Freedom Law Is Such A Big Deal. Retrieved April 3, 2015, from http://www.huffingtonpost.com/2015/04/01/indiana-religious-freedom_n_6984156.html
  2. Barber, M. (2014, April 16). How the ‘Gay’ Jihad Normalized a Filthy Practice. Retrieved April 3, 2015, from http://www.theblaze.com/contributions/how-the-gay-jihad-normalized-a-filthy-practice/
  3. Craven, R. (2015, March 31). Let’s Be Real: Why Transparency in Business Should Be the Norm. Retrieved April 3, 2015, from http://www.entrepreneur.com/article/244474
  4. Young, R. (2011). Brain storm: The flaws in the science of sex differences. Cambridge, Mass.: Harvard University Press.

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