Commentary

07.01.14

The Hobby Lobby Decision Explained. A Win For Corporations. A Loss for Employees.

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The Supreme Court’s decision in Burwell v. Hobby Lobby Stores, Inc. (formerly Sebelius v. Hobby Lobby) and the companion case Conestoga Wood Specialties Corp. v. Burwell, is a hard hit to true religious freedom. It is also a very complex court decision.

Let’s walk through the different parts of the case and opinion.

Both cases challenge the Affordable Care Act (ACA) mandate requiring insurance providers to cover preventive contraceptives for employees. The privately-owned, for-profit corporations challenged this mandate arguing that the corporations should not have to provide contraceptive care through health insurance because that would violate the owners’ sincere religious beliefs. Hobby Lobby challenged the mandate under the federal Religious Freedom Restoration Act (RFRA). Note: The Court did not address the First Amendment claims in this case.

What is a closely-held corporation?

A closely-held corporation is a private company, not traded on the stock market. Typically, it is a company run by a family or small group who are involved in the direct operations of the business. They own the business and they run the business. This could be a large corporation like Hobby Lobby with over six-hundred stores, or a small corporation like a local grocery store.

What is RFRA?

The Religious Freedom Restoration Act of 1993 is a law that says the government cannot burden a person’s sincerely held religious beliefs unless there is a compelling governmental interest to do so and the government uses the least restrictive means to implement a law or regulation.

So, what does that mean? How does the Court decide this?

A sincerely held religious belief is any religious belief of a person. The belief is not questioned by a court and is generally assumed to be sincere. The religious beliefs of the corporations in this case – opposing certain forms of birth control–were assumed to be sincere or real.

When the government makes a law that may interfere with a belief, the government’s interest must be very strong or compelling. In this case, the Court assumed the government had a strong interest in providing preventive contraceptive care for people.

In order for the government to enforce a law that may interfere with a religious belief, the enforcement or implementation must be prohibitive in the smallest way possible. If there is a way to interfere with a religious belief in a lesser way, then the law may violate a person’s religious beliefs. In the Hobby Lobby case, the Court found the government did not use the least restrictive means possible to provide contraceptive care by creating the mandate.

The Court suggested the government could have provided coverage itself or provided a religious accommodation to closely-held, for-profit corporations as it does for religiously affiliated nonprofit corporations. That accommodation allows the nonprofit organization to opt-out of the requirement by sending a form to its insurance company, which then provides contraception coverage directly to the nonprofit’s employees.

The Court does make a point to say that RFRA cannot be used to discriminate in hiring based on race. A “person” also cannot use RFRA to avoid paying income tax or social security. However, a lot of challenges remain to be seen. Although the ruling is limited to this particular mandate of the ACA as applied to closely-held, for-profit corporations, we will likely see the reasoning used in other applications.

Stay tuned for more analysis of the Hobby Lobby decision and RFRA.

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