Abstract

http://ssrn.com/abstract=2229414
 


 



Using Reverse Veil Piercing to Vindicate the Free Exercise Rights of Incorporated Employers


Stephen M. Bainbridge


University of California, Los Angeles (UCLA) - School of Law

March 6, 2013

The Green Bag, Vol. 16, No. 3, Spring 2013
UCLA School of Law, Law-Econ Research Paper No. 13-06

Abstract:     
Reverse veil piercing (RVP) is a corporate law doctrine pursuant to which a court disregards the corporation’s separate legal personality, allowing the shareholder to claim benefits otherwise available only to individuals. The thesis of this article is that RVP provides the correct analytical framework for vindicating certain constitutional rights.

Assume that sole proprietors with religious objections to abortion or contraception are protected by the free exercise clause of the First Amendment and the Religious Freedom Restoration Act (RFRA) from being obliged to comply with the government mandate that employers provide employees with health care plans that cover sterilizations, contraceptives and abortion-inducing drugs. Further assume that incorporated employers are not so protected. This article analyzes whether the shareholders of such employers can invoke RVP so as to vindicate their rights.

At least one court has recognized the potential for using RVP in the mandate cases, opining that these cases “pose difficult questions of first impression, including whether it is “possible to ‘pierce the veil’ and disregard the corporate form in this context.” The court further opined that that question, among others, merited “more deliberate investigation.” This article undertakes precisely that investigation.

Invoking RVP in the mandate cases would not be outcome determinative. Instead, it would simply provide a coherent doctrinal framework for determining whether the corporation is so intertwined with the religious beliefs of its shareholders that the corporation should be allowed standing to bring the case. Whatever demerits RVP may have, it provides a better solution than the courts’ current practice of deciding the issue by mere fiat.

Number of Pages in PDF File: 18

Keywords: corporation, limited liability, reverse veil piercing, reverse pierce, veil piercing, free exercise, first amendment, Religious Freedom Restoration Act, RFRA

JEL Classification: K22

Accepted Paper Series


Download This Paper

Date posted: March 6, 2013  

Suggested Citation

Bainbridge, Stephen M., Using Reverse Veil Piercing to Vindicate the Free Exercise Rights of Incorporated Employers (March 6, 2013). The Green Bag, Vol. 16, No. 3, Spring 2013; UCLA School of Law, Law-Econ Research Paper No. 13-06. Available at SSRN: http://ssrn.com/abstract=2229414

Contact Information

Stephen Mark Bainbridge (Contact Author)
University of California, Los Angeles (UCLA) - School of Law ( email )
385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States
310-206-1599 (Phone)
310-825-6023 (Fax)
HOME PAGE: http://www.professorbainbridge.com
Feedback to SSRN


Paper statistics
Abstract Views: 1,255
Downloads: 239
Download Rank: 70,088

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.297 seconds