Hobby Lobby and the future of religious exceptionNews added by Benefits Pro on July 1, 2014

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Did the U.S. Supreme Court’s 5-4 ruling in the Hobby Lobby case open the floodgates for thousands of businesses to disregard federal mandates if they conflict with their religious views? Or was it a narrowly defined victory for Hobby Lobby and its supporters that won’t have much application beyond paying for certain contraceptives?

Depends on who you talk to. Some say the ruling won’t be easily applied beyond specific cases like Hobby Lobby’s, whose owners objected to paying for four specific birth control methods that they claim takes human life. Others argue that the ruling paves the way for a broad interpretation of the Religious Freedom Restoration Act that could lead to placing religious beliefs of company owners above much of the law.

Let’s start at the top, with the justices themselves. Justice Ruth Bader Ginsburg, one of the three females on the court who dissented, said, “The Court, I fear, has ventured into a minefield.”

She added: “Religious organizations exist to foster the interests of persons subscribing to the same religious faith. Not so of for-profit corporations.” She predicted the ruling would set a precedent for myriad closely held companies to thumb their noses at federal mandates.

Speaking for the majority side, Justice Anthony Kennedy said the ruling is limited and “does not have the breadth and sweep ascribed to it by the respectful and powerful dissent.”

Kennedy said a mechanism for accommodating employers is “already in place” so that the government won’t be required to adjust to the majority opinion by creating “a whole new program or burden” on the government.

“In our constitutional tradition,” Kennedy wrote, “freedom means that all persons have the right to believe or strive to believe in a divine creator and a divine law. It means, too, the right to express those beliefs and to establish one's religious (or non-religious) self-definition in the political, civic, and economic life of our larger community,” Kennedy said.
The legal team behind Hobby Lobby was ecstatic with the ruling, and seemed to support Ginsburg’s concerns about how broadly it might be interpreted. Becket Fund, a non-profit, public-interest law firm, describes itself as “dedicated to protecting the free expression of all religious traditions — from Anglicans to Zoroastrians.”

“This is a landmark decision for religious freedom. The Supreme Court recognized that Americans do not lose their religious freedom when they run a family business,” said Lori Windham, senior counsel for The Becket Fund for Religious Liberty and counsel for Hobby Lobby. “This ruling will protect people of all faiths. The Court’s reasoning was clear, and it should have been clear to the government. You can’t argue there are no alternative means when your agency is busy creating alternative means for other people.”

Windham said the ruling “has important implications for over 50 pending lawsuits brought by non-profit religious organizations,”

“In two different respects, the Supreme Court strongly signaled that the mandate may be struck down in those cases too. First, it rejected the government’s argument that there was no burden on the Green’s religious exercise because only third parties use the drugs. Second, it held that the government could simply pay for contraception coverage with its own funds, rather than requiring private employers to do so,” Becket Fund said in a release.

“The handwriting is on the wall,” Windham said. “The Court has strongly signaled that the mandate is in trouble in the non-profit cases, too.”

Law professor Marci Hamilton called the ruling “extreme” and said it would be “virtually impossible to limit the interpretations to this case.”

Noting that more than 80 percent of American companies are closely held, Hamilton, professor at the Cardoza School of Law, Yeshiva University, predicted a stampede of small business owners to the courts to challenge a range of federal mandates that are at odds with their religious beliefs.

“Ginsberg has the better idea on this one,” she said. “The court has now interpreted key elements of RFRA in more religiously friendly way than in the past. This is not just a case about contraception or women, but how is it interpreted in every scenario.”

The court essentially ruled that a closely held company run by those with a specific religious belief can now claim a “psychic burden” if the government requires it to provide something to an employee that is prohibited by the owner/owners’ religion. That psychic burden can be sufficient to support a claim that the law injures the company.

“A believer can now prove a substantial burden based on a psychic injury," she explained. "That’s the idea in the case of Hobby Lobby: that [an employee] might use their health care coverage for contraceptive, or in the case of Hobby Lobby, for emergency contraception, and although the company will never know about it they will never use it themselves, now they can argue they have suffered a psychic burden as a result. So now something that would even have been considered a burden previously has been transformed into a substantial psychic burden.”

Liberals can take some small comfort in the ruling, Hamilton said, because it just may provide the impetus for Congress to overturn RFRA. That would limit the potential ripple effect of the ruling, she said. “But it will take a Democratic Congress and Democratic President with guts to do that,” she added.

Observers have speculated that the Hobby Lobby ruling could spill over from the world of small closely held businesses to major corporations. But that’s not likely to happen, at least not in any major way, said attorney Tami Simon, managing director of the knowledge resource center for Buck consultants.

“The court limited the ruling to closely held companies,” Simon said, “leaving to a later date whether large corporations can hold religious beliefs. But because large companies have public stakes in them, whether they are publicly held or not, it’s less likely they would want to go down this road. But it’s a fair question that Judge Ginsburg raises: Just how far will this decision go in terms of its breadth? Time will tell.”

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