The U.S. Supreme Court case Employment Division, Department of Human Resources of Oregon v. Smith (1989) revolved around the use of peyote, a hallucinogenic drug used in religious ceremonies by Native American Church members Alfred Smith and Galen Black. The two were fired from their jobs as counselors for using the drug and subsequently denied unemployment benefits because they had been dismissed for work-related misconduct. They argued that this violated their First Amendment rights to freely exercise their religion. In a controversial decision, the court ruled against them 5-4 stating that while states have the power to accommodate otherwise illegal acts done in pursuit of religious beliefs, they are not required to do so. This ruling significantly narrowed previous interpretations of 'free exercise' clause which protected religious practices from government interference unless there was a compelling state interest involved.

In the dissenting opinion for Employment Division, Department of Human Resources of Oregon v. Smith, Justice Blackmun argued that the majority's decision significantly diminished First Amendment protections for religious practices. He contended that under this ruling, any law not specifically targeted at religion could override a person’s right to practice their faith freely. This would mean that an individual's constitutional rights could be violated as long as it was done indirectly or unintentionally by a generally applicable law. Furthermore, he criticized the majority for abandoning the balancing test established in previous cases which weighed government interests against individuals' religious freedoms. Instead of applying this test and considering whether granting exceptions to peyote use in religious ceremonies would seriously undermine Oregon’s ability to enforce its drug laws, they chose a path which allowed no room for such considerations.