Most business owners set up corporations as legal alter-egos to avoid being held personally responsible if their businesses get sued, but in this case, the employers (in Hobby Lobby, Conestoga Wood, and Mardel) are saying that their corporations can still manifest the owners' religious beliefs even if it comes at the potential expense of their employees. The Supreme Court agrees.

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Supreme Court Rules Endows Closely-Held Corporations with Souls: Corporations Have Religious Liberty

This morning, the United States Supreme Court released its opinion in Burwell v. Hobby Lobby Stores. The opinion is available online at http://www.supremecourt.gov/opinions/13pdf/13-354_olp1.pdf

In this 5-4 decision, written by Justice Alito, the Court finds that the Religious Freedom Restoration Act (RFRA) of 1993 applies not only to individuals, but to corporations.  RFRA prohibits the"Government [from] substantially burden[ing] a person's exercise of religion even if the burden results from a rule of general applicability" unless the Government shows that the burden is (1) in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering  that compelling governmental interest.

In this case, the Affordable Care Act (i.e. "Obamacare"), which Congress passed in 2010, required employers' group health plans to provide "preventive care and screenings" for women at no cost. The Department of Health and Human Services (DHS) interpreted this as requiring that employers provide all 20 contraceptive methods approved by the FDA to all female employees at no cost to them.  Religious employers were exempt and some other non-profits were as well.  (Some have widely anticipated that non-exempt non-profits such as religious hospitals, schools, etc., will be litigating this issue very shortly as a follow-up to the Hobby Lobby case but in light of this decision the issue may be moot.)

How Far Can Corporations Take RFRA?

Regardless of what one thinks about contraception and abortion, this decision is significant in that it essentially finds that the religious beliefs of corporate owners can now translate in to the religious beliefs of the "corporation" itself.

Most business owners set up corporations as legal alter-egos to avoid being held personally responsible if their businesses get sued, but in this case, the employers (in Hobby Lobby, Conestoga Wood, and Mardel) are saying that their corporations can still manifest the owners' religious beliefs even if it comes at the potential expense of their employees.

In this decision, the majority says RFRA protects the free-exercise rights of closely held corporations, which in turn protects the religious liberty rights of the owners.

The majority opinion, page 48, addresses how far a corporation can take a RFRA defense against claims of discrimination, but claims that it must be a balancing test between "religious liberty and competing prior governmental interests."

The Court's conclusion seems to indicate that the ruling may only apply to closely held corporations, and the majority does not address the First Amendment free exercise claims.

What Could Happen? 

As expected, there is a significant dissent to this opinion. Before I get to that, let me give an example of the type of scenario I'm foreseeing coming from this case.  For example, let's say that the evangelical Christian owners of a closely-held for-profit corporation decide that in order to secure the blessings of God on the corporation, they must limit the effect of competing religious influences and decide to take steps to terminate the employment or refuse to hire those who do not share their particular religious beliefs. Would the corporate owners be able to defend themselves using today's decision in Hobby Lobby? Will there now be a hierarchy of belief between corporate owners and their employees, and if the employees' concerns are merely secular, will the owners always win?

Title VII protections against discrimination by employers that profess faith (as opposed to secular employers who will not manifest faith) may be on the chopping block as the result of today's decision.

Ginsberg's Dissent – This Decision Is Unprecedented

In her dissent, page 15, footnote 15, Justice Ruth Bader Ginsberg mentions Title VII when she counters that religious exemptions are usually specifically referenced in laws passed by Congress. She also points out that where the Court may be deferential to religious organizations, such as in the Hosanna-Tabor v. EEOC case, until this case was decided, these exemptions had not been extended to commercial, profit-making corporations.

Ginsberg points out that religious organizations are there for people who have the same faith, but not for-profit corporations. Ginsberg points out the very real problem that that there is "no support for the notion that free exercise rights pertain to for-profit corporations." Even as recently as  Citizens United v. Federal Election Commission (2010), Ginsberg points out, Justice Stevens wrote that corporations "have no consciences, no beliefs, no feelings, no thoughts, no desires." The Court had recognized that churches and non-profits were still "shelter[ed]" by the Free Exercise clause but that for-profit corporations were set up for a different purpose.

Citing the clear distinction between for-profit secular and religious entities, Ginsberg observes, "[o]ne can only wonder why the Court shuts this key difference from sight."

Hobby Lobby is Different from Elane Photography

The fact that the Court has now extended RFRA to corporations may explain why the Court earlier this year decided not to hear the case of the New Mexico wedding photographer (Elane Photography v. Willock) as the logic in Hobby Lobby will likely extend to sole-proprietorships, where the business and the individual are one and the same. It would make more sense to recognize the free exercise rights of individuals in sole proprietorships, as Ginsberg points out, rather than in corporations set up specifically to shield the owners from liability.  She also points out that the circumstances requiring provision of contraceptive services places the Hobby Lobby owners at a significant distance from handing an employee a pill. They pay into undifferentiated health care funds that and from this, some money may be spent on contraceptives well beyond their scope of influence. No employee who has religious objection is required to act against conscience by using these pills, and the choice to take the pill is solely between the woman and her physician.

This is not a justification for abortion, but rather an acknowledgment that when a benefit is legal, people can use it wisely or unwisely. It is true that there may have been another way for the government to craft a law that would allow Hobby Lobby and the other employers to be exempt from providing this coverage, but it did not, and instead the Court granted Hobby Lobby and all for-profit corporate owners an unprecedented amount of power that will make it much easier for them to make religiously-based decisions that adversely affect those employees who do not share their beliefs.
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1 Comment

  1. Dale Fuhrmeister says:

    "For example, lets say that the evangelical Christian owners of a closely-held for-profit corporation decide that in order to secure the blessings of God on the corporation, they….refuse to hire those who do not share their particular religious beliefs."
    Uh, maybe you are not aware of this, but many Christian organizations already do this and have for many years. I applied for a job at Focus on the Family in '06, and they had a long standing practice of making any potential employee sign a document with a statement of beliefs they would be expected to uphold as an employee, their signature affirming that they would do this. Who knows how many others do this as well?
    When I was still in the auto repair trade, I worked for an Evangelical Christian shop owner who had similar standards I was expected to abide by.
    So tell me, assuming you feel that Hobby Lobby is forcing its religious beliefs on their employees, is this also true of the McNeilus family in Minnesota when they are closed on the Sabbath? Or for banning smoking on the property, if they do this? This doesn't just apply to "them", you know.

 
 
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