LAUSR

Abstract This article asks whether firms should exempt employees when they object to elements of their work that go against their conscience. Fairness requires that we follow the rules of an organization we have joined voluntarily only if these rules express mutual advantage. In corporations, I argue that subordination and exemption provides for mutual advantage better than subordination plus right of exit. This is because agents want to protect their conscientious convictions, even in hierarchical organizations geared towards efficient preference satisfaction. Thus exemptions should be granted in unforeseeable circumstances, provided the costs are limited.