I attended a workshop today in which Nelson Tebbe perceptively discussed the question whether harm to third parties should invalidate government creation of religious exemptions to otherwise valid laws, and, if so, under what circumstances. Many in the audience posed questions that raised the issue whether religion is special. At first glance, one might think that under our Constitution religion must be special. After all, it contains religion clauses.
Nonetheless, there is a substantial literature arguing to the contrary, and I take a mixed position. I begin with the proposition that a major purpose of government is to make arrangements assuring that human lives flourish. A major responsibility associated with this is to assure that citizens can lead moral lives. Protecting religion under the Constitution and promoting free exercise exemptions by statute furthers that responsibility. Of course, religious institutions are filled with sinners, and some religions have twisted views of what counts as a moral life, but the Framers were not concocting a premise purely out of their imagination in believing that religion generally encourages moral lives.
Forcing a person to do an act that she feels religiously obligated not to do, or to refrain from an act that she feels religiously obligated to do, obviously does not encourage a person to lead a moral life. Religious exemptions at their best permit citizens to follow their religious convictions. It may well be that many religious exemptions created by statute cause too much harm to third parties to be sustained. When government through its exemptions benefits religion in an excessive way, the Establishment Clause should stand in the way. Notice when government creates the exemption by statute, there is no Free Exercise issue. The exemption is a statutory right, not a constitutional right, but it should be tested by the Establishment Clause.
On the other hand, if a statute imposes a substantial burden on religion (I leave the wrong-headed decision in Smith to the side– holding that a generally applicable statute creating a substantial religious burden does not create a Free Exercise issue), whether the burden is constitutional should be tested in part by the extent to which its existence harms third parties. This is a Free Exercise issue, not an Establishment Clause issue. In my view, it should be the task of courts to balance the gain in liberty against the harm to third parties in both Establishment Clause and Free Exercise contexts. I do not see why the substantiality of third party harm should be measured differently from one religion clause to the other.
Now we come to whether religion is special. Suppose an atheist feels a moral obligation to do or not to do something and government is forcing her to violate her moral beliefs. If government has a special responsibility to encourage moral lives, the moral obligation in this circumstance should stand on the same footing as religion in terms of protection whether because of the religion clauses or because of equality principles. The interesting question is whether the Establishment Clause should apply to both when statutorily created exemptions are created for both when religious and moral exemptions are created. My answer (which I cannot defend here) is that it should only apply to religious exemptions.
In summary, you will notice that in terms of moral obligations regardless of source, I see nothing special about religion in terms of protection. I do believe religion is special for purposes of the Establishment Clause. There is a long history of government giving aid purportedly to help religion with the result that religion has become quiescent or even corrupt. Moreover, there are ground to conclude that politicians have no theological expertise and will help those who will help them get re-elected. See my book The Religious Left and Church/State Relations. This history influenced the Framers, and their response to it shows that they thought religion was special and could best be protected by a form of church/state separation.