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Jul 30, 201411:01 AMForward HR

with Diane Hamilton and Nilesh Patel

Will more federal laws be tested in wake of Hobby Lobby decision?

(page 1 of 2)

Somewhere, Mitt Romney is feeling vindicated. The former presidential candidate drew much ire and ridicule for saying “corporations are people.” That sentiment did not help Romney on the election trail. However, it was recently memorialized in the Supreme Court’s Hobby Lobby decision.

In the majority opinion, Justice Alito wrote, “A corporation is simply a form of organization used by human beings to achieve desired ends … [w]hen rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of these people.”

Building off that language, the Supreme Court ruled that closely held corporations can exercise religion and can object to government regulations requiring contraceptive coverage in employee health plans.

The Hobby Lobby case is one of about 100 cases in which employers have raised religious objections to what is commonly referred to as the “contraceptive mandate” under Obamacare. The contraceptive mandate is a federal regulation requiring Obamacare-covered employers to provide minimum essential coverage, which includes preventive care and screenings for women, without any cost-sharing requirement.

Part of the preventive care and screening includes coverage for all FDA-approved contraceptive methods. In Hobby Lobby, the Supreme Court considered the religious objections of one employer, whose owners claimed life begins at conception and that it would violate their religion to facilitate access to contraceptive drugs or devices that operate after that point. Specifically, the owners objected to four contraceptive methods that they believe would interfere with the embryo after it is conceived. The court set a tremendous precedent by ruling that under the Religious Freedom Restoration Act (RFRA) closely held corporations, such as Hobby Lobby, are covered persons that can exercise religion and exempted them from the contraceptive mandate.

The majority’s discussion in Hobby Lobby makes it appear as if it should be a natural conclusion that RFRA covers corporations. To paraphrase the discussion and reasoning: RFRA protects a person’s exercise of religion. The legal definition of “person” includes “corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals.” Thus, there is a textual basis to support the court’s conclusion. In addition, the court had previously accepted an RFRA claim by a nonprofit corporation. Between the legal definition of “person” and RFRA’s applicability to nonprofits, the majority reasoned that it was logical and consistent that RFRA cover a closely held corporation like Hobby Lobby.

However, RFRA itself does not define who is a person entitled to its protections. The court had to turn to a law called the Dictionary Act to clarify the meaning of that word. The Dictionary Act states that a person can include corporations, unless the context indicates otherwise. But context in relation to what? And what happens if the context is silent?

The majority could have turned to the legislative record leading up to RFRA’s passage or to legal precedents to determine whether RFRA was intended to cover for-profit corporations. However, as Justice Ginsburg points out in her dissent, there is nothing in the legislative record to suggest such an intention; the record is silent.

In addition, there was no previous Supreme Court precedent recognizing a for-profit corporation’s right to practice religion. One cited RFRA case involved a church, a nonprofit corporation specifically organized to enable and promote a religious purpose. That appears to be enough for the majority, as it concluded that there is no significant distinction between a church and a for-profit corporation when it comes to practicing religion. The majority also appears to have concluded that RFRA protection would be denied only if the context indicated otherwise. Since the context was essentially silent, the Dictionary Act’s definition of “person” neatly resulted in the majority’s conclusion that Hobby Lobby and other closely held corporations can exercise religion.

Implications

Extending RFRA’s protection to closely held corporations just begs the question of when other types of for-profit corporations will claim coverage and exemptions to federal laws. The Hobby Lobby decision practically invites such a situation when it states, “For-profit corporations, with ownership approval, support a wide variety of charitable causes. … If for-profit corporations may pursue such worthy objectives, there is no apparent reason why they may not further religious objectives as well.”

The court’s decision glosses over the fact that religious objectives, while worthy, can also have a harmful or discriminatory effect. For example, a woman who is denied access to contraception would have to fend for herself in cases where conception occurs after a rape. She would have to pay the full costs of the medicine. What if the medicine is too expensive? Does she then have to face the choice of seeking an abortion at a later stage or seeing the pregnancy through? Lack of access or costs related to contraceptive care can also prevent women from seeking care. This can result in unintended pregnancies or undermine medical advice about the appropriate intervals between pregnancies. Pregnancies can also be harmful for women with heart disease, hypertension, depression, and anxiety.

(Continued)

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About This Blog

 Diane Hamilton, PCC, SPHR, is the owner and founder of Calibra, a coaching and consulting firm focused on maximizing leadership potential. Nilesh Patel is the principal attorney of the Mahadev Law Group, LLC, which focuses on human resources and employment law issues for organizations. He can be reached at npp@mahalawgroup.com. Both bloggers are members of Wisconsin SHRM, which is dedicated to being the state leader in HR management and the premier source for HR expertise and resources. More information can be found at www.wishrm.org. You can follow the WI SHRM blog at http://wishrm.wordpress.com.

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