Across the First Amendment, the distinction between for-profit businesses and nonprofit organizations is in trouble. In recent years, courts have rejected this distinction in the context of free-speech challenges to campaign-finance restrictions and free-exercise claims to obtain legal exemptions from health-care regulations. Although there is a great deal of popular dissatisfaction with these developments, advocates of expansive corporate rights have gained momentum.
Yet the trend toward recognizing the constitutional rights of for-profits is not inexorable. As presently developed, the First Amendment’s freedom of association does not treat for-profit and nonprofit entities in the same way. Nonprofit expressive associations can claim institutional autonomy with respect to membership and internal governance, but commercial associations are only entitled to minimal protection from state regulation. Against the backdrop of recent developments in other areas of the First Amendment, this associational asymmetry is puzzling. Why should nonprofits receive stronger constitutional protections than for-profit business corporations?
This Essay provides a defense of associational asymmetry. It contends that the free formation and expression of personal identity is a central value of association, which makes preserving associational integrity more important in some organizations than in others. As a general matter, for-profit business norms, including but not limited to the shareholder-wealth-maximization norm, crowd out personal identification among participants in commercial association. By contrast, mission-centered norms in the nonprofit sector are more hospitable to personal identification with associations. Viewed from the perspective of identity formation, therefore, the for-profit/nonprofit distinction is a reasonable proxy for an important set of values, and associational asymmetry is best justified on that basis.