The United States Supreme Court yesterday decided Burwell v. Hobby Lobby Stores [pdf] , holding that a closely held corporation is a "person" that can hold a religious "belief" for purposes of the Religious Freedom Restoration Act (which prohibits the federal government from taking any action that substantially burdens the exercise of religion unless it is the least restrictive means possible). Thus, the plaintiff was able to rely on its religious beliefs to opt out of the requirement of the Affordable Care Act (aka Obamacare) to provide healthcare coverage for contraceptives.
The issue raised by Hobby Lobby in its suit was whether closely held, for-profit companies (those that have 5 or fewer individuals who own more than 50% of the business's outstanding stock) could be required to comply with the ACA's contraception mandate over the religious objections of their owners.
Justice Alito, who wrote the decision for the majority, found that this portion of the ACA's Employer Mandate violated the Religious Freedom Restoration Act (RFRA), which prohibits the "Federal Government from taking any action that substantially burdens the exercise of religion unless that action constitutes the least restrictive means of serving a compelling government interest." In the decision, the Court found that the contraception mandate was indeed a substantial burden on the free exercise of religion. Although the Court presumed that the ACA regulations at issue served a compelling government purpose, it held that the government could find less restrictive means of achieving that interest.
Justice Ginsburg, in her dissent, states that the majority's opinion is not limited to the ACA's contraceptive mandate, but instead will enable any company to opt out of any non-tax law on the basis of a religious belief: "In a decision of startling breadth, the Court holds that commercial enterprises, including corporations, along with partnerships and sole proprietorships, can opt out of any law (saving only tax laws) they judge incompatible with their sincerely held religious beliefs."
The case's relevance to us in the employment law arena depends on whether it will affect Title VII and other workplace anti-discrimination laws. What if a company has a sincerely held religious belief that it is ok to discriminate against women or Muslims? Will this decision allow companies to opt out of laws that are not consistent with their beliefs? Justice Ginsberg cites a 1985 case in which born-again Christians who owned closely held for-profit health clubs believed that the Bible proscribed hiring or retaining an "individua[l] living with but not married to a person of the opposite sex," "a young, single woman working without her father's consent or a married woman working without her husband's consent," and any person "antagonistic to the Bible," including "fornicators and homosexuals". The case was dismissed then, but would that happen now?
There is no doubt that the Hobby Lobby decision is the most sweeping religious exemption case in modern constitutional history. The case has unsettled the law by greatly expanding the rights of corporations. But the full significance of the decision for employment law will depend on how its scope is extended or limited in future cases.