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CHAPTER 4: BUSINESS AND THE CONSTITUTION 13
2. The Free Exercise Clause
Under the free exercise clause, the government cannot prohibit religious practices.
a. Restrictions Must Be Necessary
b. Restrictions Must Not Be a Substantial Burden
CASE SYNOPSIS—
Case 4.3: Thompson v. Holm
Michael Thompson, a Muslim, was a prison inmate at Waupun Correctional Institution in Wisconsin. A
central practice of the Islamic faith is a sunrise-to-sunset fast during the month of Ramadan. The prison
accommodates this practice by providing “meal bags” at sunset to each Muslim prisoner listed as eligible. Ten
days into Ramadan, Randall Lashock, a prison guard, withheld Thompson’s meal bags for two days.
Thompson felt pressure to break his fast by going to the prison cafeteria, but under prison policy he would
thereby forfeit meal bags for the rest of the fast. Meanwhile, hunger caused him to miss prayers and undercut
..................................................................................................................................................
Notes and Questions
What unethical conduct on the part of the guards helped most to establish Thompson’s case?
Explain.. The unethical conduct on the part of the guards that helped most to establish Thompson’s case was
their dishonesty. A party’s dishonesty can be considered evidence of wrongdoing or guilt. Under that principle,
14 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
Suppose that instead of meal bags to break a Ramadan fast, Thompson had sought access to
social media to communicate with terrorists who claimed a religious basis for their activities. Would
the result have been the same? Discuss. No, the result in this case would not have been the same if,
instead of meal bags to break a Ramadan fast, the plaintiff prison inmate had sought access to social media
to communicate with terrorists who claimed a religious basis for their activities.
of the defendants’ motion for summary judgment and remanded the case. The case will likely go to trial on
remand. Does the trial court now have to follow the appellate court’s construction of the facts? No, at a
trial of this case on remand, a jury could find the facts to be otherwise. Thus, for example, on the admission of
On a decision in Thompson’s favor in a trial on remand, what might be the appropriate remedy? If
Suppose that instead of a state prison regulation and an inmate, the facts of this case had
involved a private employer and an employee who wished to grow a beard for religious reasons in
contravention of the employer’s dress code. Would the result have been the same? The result might
have been the same, but the judgment and reasoning would have been based on federal statutory
ADDITIONAL CASES ADDRESSING THIS ISSUE—
CHAPTER 4: BUSINESS AND THE CONSTITUTION 15
Religious Practices
Cases involving whether forcing an inmate to choose between daily nutrition and religious practice
is a substantial burden on the inmate’s free exercise right include the following.
• Nelson v. Miller, 570 F.3d 868 (7th Cir. 2009) (ruling that inmate’s free exercise rights were substantially
burdened when prison forced him to choose between his religious practice and adequate nutrition by denying
his request for meatless meals on Fridays).
c. Public Welfare Exception
The government can act against religious practices to protect an individual’s life or the public
in general.
D. SEARCHES AND SEIZURES
• To conduct a search or seizure, law enforcement officers must obtain a search warrant. To obtain a
warrant, a police officer must have probable cause. The warrant must be specific.
E. SELF-INCRIMINATION
No person can be compelled in any criminal case to be a witness against himself or herself. An accused
person cannot be compelled to give evidence of a testimonial or communicative nature that might
subject him or her to any criminal prosecution. This guarantee extends only to natural persons. A
corporation is not a natural person, and the privilege against self-incrimination is not available to it.
III. Due Process and Equal Protection
16 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
A. DUE PROCESS
Both the Fifth and the Fourteenth Amendments provide that no person shall be deprived “of life, liberty,
or property, without due process of law.”
1. Procedural Due Process
2. Substantive Due Process
• If a law or other governmental action limits a fundamental right, it will be held to violate
B. EQUAL PROTECTION
• Under the Fourteenth Amendment, a state may not “deny to any person within its jurisdiction the
equal protection of the laws.” The equal protection clause applies to the federal government
through the due process clause of the Fifth Amendment.
1. Strict Scrutiny
2. Intermediate Scrutiny
Intermediate scrutiny is applied in cases involving discrimination based on gender or legitimacy.
3. The “Rational Basis” Test
In matters of economic or social welfare, a classification will be considered valid if there is any
IV. Privacy Rights
A personal right to privacy is held to be so fundamental as to apply at both the state and the federal level.
Although there is no specific guarantee of a right to privacy in the Constitution, such a right has been derived
from guarantees found in the First, Third, Fourth, Fifth, and Ninth Amendments.
A. FEDERAL PRIVACY LEGISLATION
CHAPTER 4: BUSINESS AND THE CONSTITUTION 17
• These statutes include the Freedom of Information Act of 1966, the Privacy Act of 1974, the
Driver’s Privacy Protection Act of 1994, and other laws.
B. THE USA PATRIOT ACT AND THE USA FREEDOM ACT
The USA Patriot Act of 2001 gave officials the authority to monitor Internet activities and access
ADDITIONAL BACKGROUND—
USA PATRIOT Act Tech Provisions
The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act (USA PATRIOT Act) of 2001, which is mentioned in the text, touches on many topics,
including immigration, money laundering, terrorism victim relief, intelligence gathering, and surveillance of
Internet communications. Technology related provisions of the USA PATRIOT Act include the following, as
summarized. (Some of these provisions are due to “sunset” within a few years.)
Wiretap Offenses
Voice Mail
Section 209—LEAs can seize voice mail messages, with a warrant.
ESP Records
Sections 210 and 211—LEAs can obtain, with a subpoena, such information about e-communications service
Pen Registers, and Trap and Trace Devices
Section 216—LEAs can expand their use of pen registers and trap and trace devices (PR&TTs). A PR re-
cords the numbers that are dialed on a phone. TTs “capture[] the incoming electronic or other impulses which
18 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
Computer Trespassers
Section 217—LEAs can assist companies, universities, and other entities that are subject to distributed denial
ESP Compensation
Section 222—An ESP “who furnishes facilities or technical assistance pursuant to section 216 shall be
ENHANCING YOUR LECTURE—
CREATING A WEB SITE PRIVACY POLICY
Firms with online business operations realize that to do business effectively with their customers, they
need to have some information about those customers. Yet online consumers are often reluctant to part with
PRIVACY POLICY GUIDELINES
In the last several years, a number of independent, nonprofit organizations have developed model Web
site privacy policies and guidelines for online businesses to use. Web site privacy guidelines are now
available from a number of online privacy groups and other organizations, including the Online Privacy
DRAFTING A PRIVACY POLICY
Online privacy guidelines generally recommend that businesses post notices on their Web sites about the
type of information being collected, how it will be used, and the parties to whom it will be disclosed. Other
CHAPTER 4: BUSINESS AND THE CONSTITUTION 19
CHECKLIST FOR A WEB SITE PRIVACY POLICY
1. Include on your Web site a notice of your privacy policy.
2. Give consumers a choice (such as opt-in or opt-out) with respect to any information collected.
TEACHING SUGGESTIONS
1. The concept of federalism is basic to students’ understanding of the authority of the federal and state
governments to regulate business. The Constitution has a significantly different impact on the regulation of
2. The commerce clause has been interpreted as a very broad source of power for the federal government.
It also restricts the power of the states to regulate activities that result in an undue burden on interstate
commerce. Determining what constitutes an undue burden can be difficult. A court balances the benefit that
3. It might be explained to your students that constitutional law is concerned primarily with the exercise of
judicial review. The emphasis is on the way that the courts in general, and the United States Supreme Court
20 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
regulations, precedential case law, or other law.
Cyberlaw Link
CHAPTER 4: BUSINESS AND THE CONSTITUTION 21
DISCUSSION QUESTIONS
1. What is the basic structure of the American national government? The basic structure of the American
2. What is the national government’s relation to the states? The relationship between the national and state
3. What is the doctrine of separation of powers and what is its purpose? Each of the three governmental
4. What is the conflict between the states’ police power and the commerce clause? The term police
power refers to the inherent right of the states to regulate private activities within their own borders to protect or
the regulation must be balanced against the burden placed on interstate commerce.
5. What is preemption? Preemption occurs when Congress chooses to act exclusively in an area of concur-
rent federal and state powers, and a valid federal law will override a conflicting state or local law on the same general
6. In reviewing tax laws, what does the United States Supreme Court focus on? Taxes must be assessed
with geographic uniformity among the states—that is, Congress may not tax some states and exempt others. In
7. What is the distinction between the degrees of regulation that may be imposed on commercial and
noncommercial speech? Commercial speech is not as protected as noncommercial speech. Even if commercial
8. Should the First Amendment protect all speech? One argument in support of this suggestion is that all
9. What does it mean that under the establishment clause the government cannot establish any religion
or prohibit the free exercise of religious practices? Federal or state regulation that does not promote, or place a
22 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
10. Would a state law imposing a fifteen-year term of imprisonment without allowing a trial on all
businesspersons who appear in their own television commercials be a violation of substantive due process?
Would it violate procedural due process? Yes, the law would violate both types of due process. The law would be
ACTIVITY AND RESEARCH ASSIGNMENTS
2. Would the ten amendments in the Bill of Rights be part of the Constitution if it were introduced
willing to guarantee?
EXPLANATIONS OF SELECTED FOOTNOTES IN THE TEXT
Footnote 7: The regulation in Wickard v. Filburn involved a marketing quota. The Supreme Court upheld
the regulation even though it would be difficult for the farmer alone to affect interstate commerce. Total supply of
Footnote 11: Massachusetts imposes a three-tier system on the sale of alcoholic beverages. Producers
can sell only to in-state wholesalers, who must obtain licenses to sell to retailers, who must be licensed to sell to
In Family Winemakers of California v. Jenkins, the U.S. Court of Appeals for the First Circuit affirmed. The
state’s wine licensing and distribution system “altered the competitive balance to favor Massachusetts's wineries and
CHAPTER 4: BUSINESS AND THE CONSTITUTION 23
The Twenty-First Amendment to the U.S. Constitution provides that the “transportation or importation into any
State, Territory, or possession of the United Sates for delivery or use therein of intoxicating liquors, in violation of the
When it is difficult to predict how the law might be applied—as in cases arising under the dormant
commerce clause—what is the best course of conduct for a business? There are many “gray areas” of the law in
which it is difficult to predict how a court will rule in a particular set of circumstances. For example, if a consumer’s
How might the issues related to the purchase of out-of-state wines have changed as a result of
consumers’ increased use of the Internet? In some ways, the Internet has “leveled the playing field” to make the
The court held that the Massachusetts statute discriminated against out-of-state wineries “by design”
(intentionally). How can a court determine legislative intent? Courts often look to legislative proceedings
(transcriptions of meeting minutes, hearings, floor debates, and the like) to determine legislative intent. In this case,
Footnote 29: Mount Soledad is in San Diego, California. There has been a forty-foot cross atop the peak
since 1913. Since the 1990s, a war memorial has surrounded the cross. The site was privately owned until 2006
when the federal government acquired it to preserve the war memorial. Steve Trunk and others filed a suit in a federal
24 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
If the forty-foot cross were replaced with a smaller, less visible symbol of the Christian religion and
the symbols of other religions were added to the display, does it seem likely that any parties would object?
Yes. Those who are offended by the association of any religion with their state would likely object to the inclusion of
religion should be honored to the fullest.
If the cross in this case had been only six feet tall and had not had a long history of religious use,
would the outcome of this case have been different? Why or why not? A main reason that the court in this
case found an establishment clause violation was because the cross was so large that it physically dominated the
Can a religious display that is located on private property violate the establishment clause? Explain.
Probably not. Individuals can erect religious displays on their own private property without constitutional implications.
Should religious displays on public property be held to violate the establishment clause? It might be
argued that if a religious symbol is only one part of a larger display that features secular symbols, such as reindeer
