Hobby Lobby: Women's Rights v. Corporate Beliefs

In a 5-4 decision in which all five of the justices in the majority were male and all three of the female justices dissented, the U.S. Supreme Court held in Burwell v. Hobby Lobby that the government cannot require closely held corporations to provide health-insurance coverage for methods of contraception that violate the sincerely held religious beliefs of the companies' owners.

This divisive opinion pits women's rights against the idea of corporate beliefs, and understanding the nuances of the opinion and the blistering dissent is crucial to understanding its implications.

How Did We Get Here?

In 2010, the Affordable Care Act (ACA) was enacted, requiring employers that have 50 or more full-time employees to offer health insurance coverage that provides "minimum essential coverage." Under the ACA, the employer's group health plan must cover preventive care and screening for women without any cost sharing requirements, including FDA approved contraceptive methods, sterilization procedures and patient education and counseling. However, exemptions exist for religious employers, grandfathered plans, and employers with less than 50 employees.

Certain for-profit corporations, including Hobby Lobby and Conestoga Wood, challenged this mandate, arguing that it conflicted with the religious beliefs of their owners. Specifically, the parties argued that four of the twenty FDA-approved contraception methods (including intrauterine devices or IUDs and the morning after pill) can function by preventing the implantation of a fertilized egg. The companies object to abortion for religious reasons and contended that, under their religious beliefs, the four contraceptive methods at issue cause an abortion.

The Hobby Lobby case made its way up through the 10th Circuit Court of Appeals, and the Conestega Wood case arose through the 3rd Circuit Court of Appeals, with differing outcomes. In Hobby Lobby, the 10th Circuit Court of Appeals found that corporations do in fact have religious rights under the Religious Freedom Restoration Act of 1993 (RFRA), which provides that the government shall not substantially burden a person's exercise of religion. The 3rd Circuit Court of Appeals determined that a for-profit, secular corporation cannot engage in the exercise of religion and therefore cannot assert a claim under the RFRA, and that the individual owners of the corporation do not have viable claims because the mandate is imposed on the corporation.

Understanding the Opinion

Writing for the majority, Justice Alito took the following analytical steps in Hobby Lobby:

  • The companies' owners didn’t forfeit the protection of their religious rights when they organized their business as corporations.
  • The RFRA applies in these cases because Congress included corporations within the RFRA's definition of "persons" under the Dictionary Act.
  • The mandate to cover FDA-approved contraception methods substantially burdens the exercise of religion.
  • While it’s assumed that the government's regulations serve a compelling government interest, the mandate isn’t the least restrictive means of serving that interest.
  • The government devised a system that operates for religious non-profit corporations, whereby employees of such religious employers have access to all FDA-approved contraceptives.
  • The same system can be made available to the owners of closely held for-profit corporations who have similar religious objections.
  • This system constitutes an alternative that achieves all of the government's aims while providing greater respect for religious liberty.
  • The government could also assume the cost of providing the four contraceptive methods.

 

Narrow Ruling v. "Startling Breadth"

Justice Alito reiterated at several points in the opinion that the holding of this case was limited to closely held corporations and the contraceptive mandate. Writing for the dissent, Justice Ginsburg railed against the "startling breadth" of the majority's holding. In her view, the Court was unleashing commercial enterprises to opt out of any law (except tax laws) to which they objected based on their sincerely held religious beliefs. Ginsburg stressed the following points:

  • The ACA sought to remedy the fact that women of childbearing age spend 68 percent more in out-of-pocket health care costs than men, and increased access to contraceptive services would result in significant public health benefits.
  • The context of the RFRA indicates that the Dictionary Act's definition of "person" should not apply, and there’s no case law to support the notion that free exercise rights apply to for-profit corporations.
  • While the companies' owners' beliefs are sincerely held, the connection between their objections and the contraceptive coverage mandate is too attenuated.
  • The government adequately demonstrated that the mandate furthers compelling interests in public health and women's well-being.
  • While the parties only objected to four methods, the majority's holding appears to permit companies to object to all forms of contraceptives.
  • The proposed alternative of having the government pay the cost would impede women's ability to obtain contraception and require them to learn about and sign up for a new government benefit, one that presently doesn’t exist, and is a cost that other programs cannot absorb.
  • None of the proposed alternatives can serve the compelling interest that Congress sought to address in enacting the mandate.

 

Inaccurate Premise?

Justice Alito inserted a footnote that placed the heart of the companies’ owners’ claims clearly in doubt. At footnote 7, Alito writes, "The owners of the companies involved in these cases and others who believe that life begins at conception regard these four methods as causing abortions, but federal regulations, which define pregnancy as beginning at implantation, see, e.g., 62 Fed. Reg. 8611 (1997); 45 CFR §46.202(f) (2013), do not so classify them."

Implications for Employees and Employers

In the majority opinion, Alito claims the ruling to be narrowly tailored to closely held corporations and four methods of contraception. As a result, it shouldn’t apply to publicly traded companies or other items of coverage. However, if Ginsberg's warning proves prophetic, the effect of this ruling could be far reaching.

Female employees at Hobby Lobby and Conestoga will be forced to pay out of pocket for birth control, unless one of the government solutions relied on by Alito will work. As a government solution was the basis of Alito's reasoning, the inability to find such an alternative system could leave his entire "least restrictive means" argument in tatters.

In the meantime, however, given the cost of certain methods of birth control, many women may decide that it’s too costly to obtain. Other employers may join Hobby Lobby and object to covering some or all types of birth control, leaving many more women with the choice of paying out of pocket or foregoing birth control altogether.