Monday, the Supreme Court handed down big win for corporations in the Hobby Lobby case. The result is unprecedented — and the court’s reasoning threatens to dramatically expand the ability of religious businesspeople to get special relief from laws that apply to everyone else.
The case, of course, concerns the so-called contraceptive mandate, a part of Obamacare that requires employers to provide insurance coverage for FDA-approved contraceptives. Hobby Lobby, a large retail business, asked the court for special relief from the obligation to provide forms of contraception that offend its managers’ religious beliefs. A 5-4 majority ruled in its favor, saying that religious freedom law protects the company from having to provide full coverage to its roughly 13,000 employees.
This result is unprecedented because the Supreme Court has never granted a religious exemption to a for-profit business. In an important earlier precedent, the court specifically held that “[W]hen followers of a particular sect enter into commercial activity as a matter of choice,” they cannot superimpose their “conscience and faith” onto laws that everyone else must follow.
In this particular situation, the harm of exempting Hobby Lobby from the contraception requirement is likely to be limited. After the decision, the Obama administration can enact regulations guaranteeing that Hobby Lobby’s employees receive coverage. After all, the government has said that it is cheaper for insurers to provide contraception for free than to cover costs associated with unwanted or accidental pregnancies.
Yet even if that is true, the court’s reasoning today is “startling” and even “radical,” as Justice Ruth Bader Ginsburg says in her dissent.
First, the court gives no principled reason why large publicly-traded companies could not bring similar claims for religious freedom exemptions from economic regulations.
What if a company objects to the minimum wage, or to employment discrimination laws? The court says that such challenges are unlikely as a practical matter, but it provides no legal bulwark against them.
Second, the court says that the government can be required to pay for any costs that may result from a religious freedom claim — at taxpayer expense. True, the cost of providing coverage to employees in this case may not be prohibitive, if the government’s accounting is right.
But in future cases addressing other situations, the court says that government expense — even large expenses that may have to be borne by us all — are no obstacle. That’s not just unfair to other corporations and businesses that don’t have a religious objection, it forces the American taxpayers to pay for the owners’ religious objection.
Finally, nothing the court says is necessarily limited to the topic of women’s health, pressing as that concern is. All manner of economic and civil rights legislation could conceivably be vulnerable, according to the rules laid out today.
A big part of the reason that the court has never granted religion exemptions in the commercial realm before today is that they are hard to cabin. As the dissent points out, there is no good way for the court to distinguish between good and bad religious beliefs without favoring one religion over another, in violation of the Establishment Clause of the Constitution.
Notably, challenges could arise to civil rights laws that protect gay men and lesbians, especially in the context of marriage equality. We have already seen claims by for-profit business owners who believe they should be exempt from civil rights laws because they are religiously opposed to marriage between people of the same sex or gender. The court’s decision will encourage those making such claims.
Hobby Lobby is the most sweeping religious exemption case in modern constitutional history. The full significance of the decision will rest on how its scope is extended (or limited) in future cases. But for now, Hobby Lobby has unsettled the law by greatly expanding the rights of corporations, presenting serious risks for employees, and imposing costs upon us all.
Tebbe is Professor of Law at Brooklyn Law School and Visiting Professor of Law at Cornell Law School. Schragger is Perre Bowen Professor and Barron F. Black Research Professor of Law at the University of Virginia School of Law. Schwartzman is Edward F. Howrey Professor of Law at the University of Virginia School of Law.