What to Watch for When the Supreme Court Decides the Hobby Lobby Case

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June 18, 2014

In its Citizens United ruling that corporations have free speech rights that can trump campaign finance laws, the U.S. Supreme Court essentially agreed with the worldview Mitt Romney espoused on the campaign trail: “Corporations are people, my friend.”

We may soon feel further reverberations of that worldview. The Court is preparing to rule in two cases asking what some see as related questions. Since businesses have robust speech rights, do they also have the right to pray and protections for their religiously motivated conduct? Should business owners at least be seen as engaging in protected religious practices when selling non-religious goods such as picture frames and kitchen cabinets? If so, should business owners also be able to exempt themselves from rules that protect others by showing that those rules burden their religiously motivated conduct? How much burden would be required? And what about the impact on employees or customers?

These questions are of such importance to Lambda Legal’s mission that we submitted a friend-of-the-court brief in the two cases: Sebelius v. Hobby Lobby and Conestoga Wood Specialties v. Sebelius. The cases challenge the Patient Protection and Affordable Care Act (ACA)'s requirement that birth control be included in employees’ health insurance coverage. The owners of these large, family-owned businesses disapprove of contraception for religious reasons, and object to their employees having insurance coverage for contraception through their health plans. Joining in our brief are GLMA: Health Professionals Advancing LGBT Equality, and Pride at Work AFL-CIO.

Our brief vigorously supports the federal government’s position that those engaged in secular, commercial activity do not have religious rights to disregard rules that protect others and apply to everyone in the particular field. As long as the rules do not target religious people or groups, they must be followed to ensure the health, safety and fair treatment of workers, customers and others.

The Supreme Court has numerous options for deciding these cases.

Possible Rulings:

  • The Court could hold true to a strict demarcation between the commercial marketplace and the religious sphere, and hold that businesses selling goods or services to the public are not engaged in religious practice when doing so, and thus are not entitled to ignore rules that regulate commerce for everyone’s protection.
  • Or it could agree that owners of privately held “S corporations” — such as the plaintiffs in these cases — can claim religious rights because of the different corporate structure of these businesses.

If the Court decides religious rights are at stake, it will face at least three questions posed by a federal law called the Religious Freedom Restoration Act (RFRA). When it passed RFRA by overwhelming margins in 1993, Congress said it was reinstating the legal test the Supreme Court had used for decades to decide religious freedom cases.

Under that test:

  1. If a government rule imposes a substantial burden on exercise of religion, then
  2. the rule must serve a compelling public purpose, and
  3. it must not reach too broadly.

So, in these pending cases, the Court is asked to give guidance about how much burden on owners’ religious rights qualifies as “substantial”? Are gender equity and women’s reproductive health “compelling” state interests? And, if women’s reproductive health and justice require inclusion of FDA-approved birth control methods in employee health plans, then is the ACA contraception coverage mandate properly framed so as not to reach too broadly?

But this three-prong test is not the entire RFRA story. The pre-RFRA court decisions also emphasized that religious liberty does not mean liberty to impose one’s beliefs on others. In the employment context, this has meant business owners may not impose their beliefs on their workers. Here’s the rub: This principle is so basic that Congress did not write it explicitly into RFRA as a fourth prong. And during the March 25 arguments before the Supreme Court, some justices appeared inclined to apply only the literal words of RFRA and not basic principles stressed in the case law that RFRA purportedly “restored.” That’s why these cases inspire such concern.

What’s at Stake?

Religious critiques of contraception coverage can as easily be leveled at coverage for blood transfusions, vaccinations, sterilization, infertility care and same-sex spouses. And why stop at employee health insurance? Opening the door to religious liberty claims by for-profit businesses invites demands for exemptions from a host of federal statutes. We already see religious objections to equal workplace opportunity for women (especially unwed mothers) and LGBT people. However the Court rules is likely either to constrain or to prompt a lot more such “religious refusals” by businesses.

Rulings in favor of Hobby Lobby and Conestoga would be radical departures — not just because the potential consequences are alarming. Turning back to the three-prong test: For these businesses to win, the Supreme Court must first accept their theory that birth control coverage amounts to sinful complicity with their employees’ ostensibly sinful conduct. This theory says business owners’ ability to live consistently with their own religious tenets is burdened substantially if they must maintain even indirect, tenuous connections with their employees’ independent decisions.

But if an employer’s payment for a group-health policy can be considered complicit endorsement of all covered medical decisions, whether or not the employer knows of the decisions, why would payment of wages directly to employees be less of an endorsement of employee decisions to buy liquor, pork or a gift for a gay friend’s wedding?

As to the test’s second prong, pre-RFRA case law said the public has compelling interests in ending sex discrimination. That should require equal insurance for birth control, even if owners’ religious liberty is burdened substantially by the coverage rule, as long as the rule doesn’t sweep too broadly.

Here again, the companies’ arguments have been radical. They say the public interests cannot be compelling because objections of religious organizations are being accommodated by other parts of the ACA, and because the ACA phases in its requirements over time. Those arguments ignore the settled practices of accommodating religious employers in ways not done for commercial enterprises, and of implementing law reforms in stages. Neither argument should succeed.

The bottom line is that the owners’ approach is a blueprint for a dramatic restructuring of our government’s ability to limit religiously motivated conduct that harms others in business settings. In demanding religious rights for their commercial activity, Hobby Lobby and Conestoga Wood offer no limiting principles. If a Supreme Court majority is tempted by their design, perhaps its decision will include cabins and fences. We should hope so. Any glance across global headlines reveals how fast societies can lose the kind of “ordered liberty” — with freedom of religion and freedom from religion — that our Founders thought they had secured.

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Lambda Legal is grateful to the Anita May Rosenstein Foundation for partially funding the work of the Law and Policy Project.