Politics

Corporations and Abortion: A Perfect Storm of Controversy

In the wake of Dobbs, businesses will have to make tough decisions in an uncertain legal landscape

Published by
Brian Knight

Disclaimer: The purpose of this piece is not to opine on the constitutional, legal or moral status of abortion. Out of necessity I will use some nomenclature that is not universally accepted, but no endorsement of any position is intended.

On June 24 the United States Supreme Court held in Dobbs v. Jackson Women’s Health Organization that there is no right to an abortion under the U.S. Constitution. While the ruling does not outlaw abortion, it does remove a major impediment to states’ restricting or outlawing abortion. Multiple states have passed or are expected to pass significant restrictions or bans on abortion now that the Constitution is no longer a barrier.

The court’s decision is obviously controversial, and it will have long-lasting impacts on American politics. One more immediate impact is that corporations are choosing, or being forced, to play a role in the debate. In some cases, corporate management may earnestly believe that supporting access to abortion is morally correct. In others, they may feel that they need to provide this support because their customers or employees demand it.

Given the controversy over abortion, and the increasing controversy and pushback over politicized corporate activity, it would not be surprising to find corporations’ actions scrutinized and perhaps targeted by legal action in the legislatures and courts. However, given how complex politicized corporate activity can be, it is worth trying to anticipate some of these legal issues and think through their implications.

In the lead-up to several recent laws restricting abortion at the state level, some corporations explicitly came out in opposition. After those laws were passed, and presumably in anticipation of Dobbs, multiple corporations had clarified or changed their benefits policies to cover employees leaving their state of residence to lawfully obtain an abortion. Some, such as Salesforce, announced they would help employees transfer out of states where the laws were in effect.

Other firms go even further with their support. For example, Uber and Lyft announced they would cover legal fees in cases where a driver was sued for enabling an abortion. Likewise, Patagonia has announced it will provide protest training and post bail for employees arrested for peacefully protesting for “reproductive justice.”

So, are these examples of firms playing politics? Is corporate America trying to frustrate the will of the voter by circumventing now-constitutional state laws? And if so, should the federal government intervene? I don’t know. But I do know that the answers will depend on nuanced facts and circumstances, and no matter the outcome, some people will disagree. Considering just the interstate travel issues reveals that the legal and policy questions in the aftermath of Dobbs will be complex and challenging.

Relocating to States With Less Restrictive Abortion Laws

There are two separate but related issues involving interstate travel and abortion. First, some firms may allow employees to permanently move to an abortion-friendly state. Second, firms may pay for travel expenses for employees seeking to procure abortions in another state. These two situations may have very different legal consequences.

Let’s begin with a firm allowing or helping its employees relocate to another state with less restrictive laws. In this scenario, is the company trying to maximize the number of abortions that might occur? Maximize the number of women who can avail themselves of a procedure that the company’s leadership considers a right, or at least not something that should be prohibited? Is it trying to signal to customers that the firm’s values align with theirs? Or is it merely trying to accommodate its employees’ and prospective employees’ preferences in order to recruit and retain the best talent?

One way to assess the firm’s motives is to ask if its relocation policy is a general one or specific to abortion. If, for example, a firm offers flexible locations for workers who want to live under a certain regulatory regime and applies the policy equally—regardless of whether the issue in question is abortion, gun rights or whatever else—it would be hard to argue the corporation’s leadership is trying to use corporate assets to further any given policy. Conversely, if the firm is selective about which issues they are willing to relocate over, that would be evidence of a preference.

Of course, even if the firm is selective, its motive may not be to further a particular political goal, but rather to placate important constituencies—such as current and prospective employees or customers—by being seen as supportive of abortion. In this case, the corporate apparatus may be promoting a certain political goal, but it isn’t management that is driving the bus.

Even if the firm is deliberately engaging in political advocacy, is this something the law can or should concern itself with? It is a common and long-standing practice for firms to make decisions on where they open offices or place employees on the basis of a location’s regulatory environment. While abortion is not generally directly related to a firm’s line of work, recruiting and retaining talent is. Further, companies that support employee relocation are merely helping employees not to be subject to a state’s restrictive law, not deliberately helping employees to evade it.

However, there is one constituency that might legitimately claim to be harmed by the firm’s decision: the owners of the firm, especially in the case of public companies where ownership is dispersed among many shareholders. If the company’s management decision to allow relocation harms its performance—especially if the decision was motivated by management’s political preferences rather than a good-faith belief that the decision would maximize value—the shareholders could potentially have a claim that would merit legal intervention. Under current law, firm management has broad discretion, but that may change in future, especially in the face of increased corporate politicization.

Helping Employees Cross State Lines To Obtain Abortions

A related, but arguably materially different, scenario is that of firms paying for and providing travel support to employees who have to leave their home state to obtain an abortion. (Let’s assume this is an elective abortion with no threat to the employee’s life or health, no evidence of serious fetal abnormality, and no issues of rape or incest.) Is this an example of corporate political activism? Of corporations engaging or interfering with the democratic process? Or is this simply providing fringe benefits, including healthcare, to employees? The answer would seem to hinge on what the company, and the voters, think of abortion. Is it a medical procedure that is legal in some states but not others; a human right, the restriction of which is suspect at best; or murder?

If the firm adopted the first view of abortion, it could argue that providing travel benefits is not particularly political, especially if it provides those benefits for other procedures (as JPMorgan does for organ transplants, for example). In this case, the company is not trying to influence or frustrate the democratic process or state laws. Rather, it is allowing employees to get covered care, where such care is available. Of course, if a firm were more willing to support abortion travel requests than requests for travel for other procedures, that might indicate some degree of political motivation. But even if the company had a political preference, would it be activist in any meaningful sense?

One complicating factor is that the analogy to other medical procedures is not perfect. Whereas an employee may need to travel for an organ transplant because that is where the organ is, or because there is a specialist whose services are needed, there are not (at least as far as I am aware) any state prohibitions on receiving such a transplant. Conversely, an abortion is unavailable presumably because the state where the employee lives has prohibited her from accessing the procedure.

Also, while an employee seeking an organ transplant involves only one party traveling across state lines, an employee traveling to get an abortion will presumably, in the eyes of the employee’s home state, involve two—the employee and the fetus.

And therein lies the rub: While a company might view abortion as one medical procedure among many, the laws that prohibit abortion presumably view it as the killing of an entity whom the state has a legitimate interest to protect. An employer may view paying for an employee in Oklahoma to fly to California for an abortion to be on par with sending someone to Cedar Sinai for specialist treatment, but the state might view it as aiding and abetting something akin to kidnapping, which the state believes it has a clear and compelling interest in preventing.

Justice Kavanaugh, in his concurrence to the Dobbs decision, argues that states could not prohibit someone leaving the state for an abortion because there is a constitutional right to travel. But this conclusion is not clear, a concern raised by Justices Breyer, Sotomayor and Kagan in their dissent. While there is a general right to interstate travel, there are also exceptions in cases where a crime is being committed involving another person, such as kidnapping.

Legal Risks and Consequences

If states can legitimately argue that they can prohibit someone leaving the state for the purposes of obtaining an abortion—and that is admittedly a big if—firms providing travel support may risk significant legal exposure. In fact, based on the recent trend in legislation to target abortion providers rather than women who have abortions, it isn’t unreasonable to expect that these states would focus on, and seek to harshly penalize, those who facilitate the travel—especially if the facilitator is a corporation, which is less likely to be a sympathetic defendant.

The question of whether states can penalize leaving the state for an abortion will likely have to be resolved through either federal legislation or another Supreme Court case. But in the meantime, it could become one of the most controversial questions surrounding corporate actions that are seen as supporting or facilitating abortion.

Another potential source of political and legal controversy is the relationship between a corporation’s management and its shareholders. Getting into protracted legal battles with multiple states may be harder for firm management to justify as value maximizing, and given how impassioned all sides are on the topic, shareholder fights may become more frequent and contentious. Further, shareholders who oppose abortion may argue that they don’t want their investment to be used to facilitate abortion, even if it is profit maximizing—a version of “stakeholder capitalism” that could unleash a host of similar arguments on other controversial issues.

Finally, corporations that actively inject themselves into the abortion debate become a catalyst for even greater politicization of commerce. It is not surprising that corporations find themselves motivated, whether by internal policy preference or a desire to placate a constituency, to overtly involve themselves in the abortion controversy. But in doing so, they invite further demands on them to be the means by which political questions are de facto resolved; moreover, they may face serious backlash from those who oppose their decisions and actions.

In that backlash lies another risk—that politicians and voters will respond excessively and inappropriately to corporate action. There may be cases where a corporation’s actions do merit a legal response. But even then, the response needs to be measured, appropriate and consistent with both the Constitution and the U.S. tradition of limited government. If voters see corporations as trying to subvert democracy, there will be a strong temptation to use the law not as a tool to correct a specific problem but rather as a club to punish enemies. Falling into this trap will both exacerbate political polarization and risk fatally wounding the market-based economy that, while not perfect, has enabled broad-based prosperity.

Abortion is one of the most controversial facets of American political life, and it will likely remain so for the foreseeable future. Given how high passions run, and how divergent peoples’ views are, it is not surprising that many corporations find themselves in the debate. What role they should play—and how others, including the government, should respond—should be decided by calm, deliberate analysis, with an eye to preserving the legitimate scope of government and the market. Hopefully the U.S. will be able to do so.

Brian Knight

Brian Knight is the Director of Innovation and Governance and a Senior Research Fellow at the Mercatus Center at George Mason University.

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