Burwell v. Hobby Lobby Stores, Inc.
In 2010, Congress passed the Affordable Care Act (ACA). Under the ACA, the Department of Health and Human Services (HHS), is authorized to promulgate regulations on the kinds of contraceptives and family planning services that should be covered under certain employer-based health plans. Previously, HHS exempted a broad class of religious institutions (e.g. churches, religious orders, and their integrated auxiliaries) and not-for-profit organizations. Eventually, HHS concluded that any contraceptive approved by the FDA should be covered. Under the contraceptive mandate, any company not in compliance is subject to a penalty of $100 per individual per day. Alternatively, companies can avoid this financial penalty by canceling their employer-based plans, paying affected employees higher hourly wages, and remitting a calibrated tax to the IRS.
Hobby Lobby Stores & Conestoga Wood Specialties
In 2012, three for-profit family businesses (Hobby Lobby Stores, Mardel, Inc., and Conestoga Wood Specialties), challenged the contraceptive mandate under the belief that it burdened their Christian beliefs in violation of the Religious Freedom Restoration Act (RFRA). Each company challenged the mandate through a series of actions before the cases were consolidated into one case. The consolidate case involved the constitutional question of whether the contraceptive mandate violated religious rights guaranteed by the First Amendment, together with a narrower statutory question about the scope of the RFRA.
ISSUE: (1) Whether the Religious Freedom Restoration Act of 1993 encompasses for-profit businesses organized as closely held corporations; (2) If so, whether the Affordable Care Act’s so-called “contraceptive mandate” imposes substantial burdens on these companies; and (3) is the least restrictive means of furthering the government interest in providing cost-free access to the four methods of contraception at issue.
HOLDING: As applied to closely held corporations, RFRA permits certain for-profit employers to deny their employees cost-free access to the contraceptives to which they are otherwise entitled for purposes of the Affordable Care Act. The contraceptive mandate furthers a legitimate government interest, but fails the least restrictive means test.
RATIONALE: RFRA bars the government from imposing regulations that burden a “persons exercise of religion,” unless the regulation (1) furthers a “compelling governmental interest; and (2) is the least restrictive means [of doing so].” 42 U.S.C. §§2000bb-1(a),(b). Consistent with RFRA’s requirements that courts apply strict scrutiny to governmental regulations that burden the exercise of religion, the Supreme Court in a 5-4 decision ruled that HHS erred in not granting exceptions to the contraceptive mandate for for-profit family businesses organized as a corporation. On this view, the contraceptive mandate was not the least restrictive means for achieving the government’s interest in expanding access to cost-free family planning services. And so, the Court declined to make a decision on the constitutional question of whether the so-called contraceptive mandate violated the First Amendment, since the case could be narrowly decided on statutory grounds.
Central to the Court’s analysis was the fact that HHS exempted not-for-profit organizations who rejected the mandate on the basis of conservative, anti-abortion beliefs. For instance, whereas non-profits were exempted from the mandate and did not have offer cost-free contraceptives to their female employees, provided they certified objections in letters to insurers, for-profit family businesses were not entitled to similar considerations. And so, the majority saw no need to draw distinctions between for-profit and non-profit corporations. What’s more, the majority felt that the protections of the RFRA extended to corporate shareholders and managers who had religious objections to the contraceptive mandate. Here, each corporation was operated by owners who had well-documented anti-abortion religious beliefs. The mandate at issue in this case substantially burdened this right, notwithstanding the fact that providing health coverage for contraceptives did not involve the destruction of embryos.
Drawing on a viewpoint that could be appropriately defined as reflecting the religious viewpoints of Justice Alito, who wrote the majority opinion, the Court takes the position that for-profit, closely held companies should not, as a matter of law, be forced to compromise their morals in the furtherance of a government interest. Consistent with this perspective, the opinion noted that even though for-profit family businesses like the Hobby Lobby had many incentives to comply with the mandate, they stuck to their religious beliefs in refusing to offer cost-free access to contraceptives. In response to the concern that granting exemptions for closely held corporations would pave the way for companies to use religious objections as a thinly veiled attempt to mask discriminatory policies, the Court concludes that federal law barring employment discrimination did not impinge upon the RFRA.
Analysis
Admittedly, it is still unclear how far this decision will extend beyond the narrow statutory grounds by which it was decided. Certainly, the majority opinion endeavors to craft a decision that does not establish novel constitutional law, adhering to the Court’s institutional tradition of deferring decisions on matters of constitutional law, so long as there are alternative means of resolving the legal questions at issue. Here, the Court does not address the constitutional question of whether the contraceptive mandate is at odds with the First Amendment. Instead, the Court limits its holding to a three-pronged analysis of whether the mandate is inconsistent with the RFRA. Even so there are many reasons to be concerned that this decision, as summarized in Justice Ginsburg’s dissent, has established a precedent that will redound to future cases involving religiously observant for-profit companies who desire to claim privileges and immunities unavailable to anyone else. In holding that the exercise of religion is inseparable from the corporate charter of closely-held corporations, the Court has, at a minimum, paved the way for private business to bypass federal mandates by couching their rejections in religious terms.
Overall, the decision in this case is problematical for two primary reasons: First, it is a mistake to expand the scope of the RFRA to encompass for-profit businesses like those of the parties in this case because such companies do not “exercise” religion, whether for purposes of federal law or otherwise. Secondly, the majority opinion seems to disregard the incontrovertible fact that under the so-called “contraceptive mandate,” the federal requirements are limited to employer-based health plans and, in either case, for purposes of corporate law, the business entity is separable from the owner. In so far as the mandate furthers a compelling interest, it does so by endowing female employees with an important health benefit in furtherance of a comprehensive health coverage scheme.
Besides, the Government made a persuasive case that the contraceptive mandate if rule of general applicability, meaning it applies to all profit-making businesses equally, meaning it is a neutral obligation that does not burden the exercise of religion because it, after all, does not contravene any religious exercise. Clearly, HHS has already carved exceptions for religious institutions and non-profit organizations with conservative beliefs. Admittedly, the law “grandfathered” the health plans of certain for-profit businesses. However, such exemptions are merely a phased sequence. Even still, this phased sequence, alone, does not attenuate the argument that the mandate is a neutral obligation of general applicability. In truth, the contraceptive mandate does not burden the exercise of religion for a simpler reason. On this view, the mandate does not burden the exercise of religion because the female worker receiving the health benefit would be making all the critical decisions about preventive care, including which contraceptives to take, and the more critical decision of when to use them. In short, the connection between the religious objections of the employer who finances cost-free access to preventive care and the choices of employee are too remote to factor into the legal analysis.
Of course, there is also a convincing religious liberty rationale for criticizing the outcome of this case. On this view, exempting for-profit employers from the requirements of the Affordable Care Act, or any other federal law for that matter, ignores conventional notions of the role religious institutions play in civil society. From this perspective, Congress has historically afforded religious institutions certain exemptions from federal law, but has been unwilling to extend this privilege to for-profit businesses. And so, if Hobby Lobby and similar for-profit businesses are entitled to the same privileges traditionally reserved for not-for-profit religious affiliated organizations, the predictable consequence is likely to be, as the Government argued in its brief, that Congress will be discouraged from this process based on the concern that doing so will have a trickle-down effect on for-profit businesses.
Works Cited
Burwell v. Hobby Lobby Stores, Inc. No. 134 S.Ct. 2751. U.S. Supreme Court. 2014.
