July 22, 2019 Substantive Law

The Effects of Hobby Lobby

By Mark Goldfeder

Reprinted with permission from Labor and Employment, Spring 2019 (47:3) at 4. ©2019 by the American Bar Association. All rights reserved. This information or any or portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

The five-year anniversary of the Supreme Court’s decision in Burwell v. Hobby Lobby is fast approaching. With that amount of perspective, it is worth revisiting some of the labor and employment law concerns that were raised pre-decision.

Hobby Lobby addressed the intersection of the Restoring Religious Freedom Act and the Affordable Care Act’s contraceptive mandate, which requires employers to provide their employees with health insurance coverage for contraception. This mandate, the Court ruled, could not be applied to closely held for-profit corporations with religious objections to certain types of contraception. Instead, the government would make up the difference.

Both before and right after the decision, there were two main concerns about how this decision might affect employment rights and responsibilities. The first was particular: although in Hobby Lobby the company was only objecting to four of the 20 FDA-approved contraceptive methods (i.e. those they considered to be abortifacients), another company in the future might object to providing any contraception coverage. The second concern was broader: this victory would enable corporations to disobey any civil rights statutes by hiding behind religious objections.

Thankfully, these legitimate concerns have not come to pass. The reasons are twofold. First, the Hobby Lobby ruling was actually quite narrow, far narrower than many understood at the time. And second, the law before, during, and after the case already had many built-in safeguards to ensure that employees would not suffer at the hands of their religious employers. Hobby Lobby simply highlighted the importance of having a good balancing test.

As to the narrowness of the ruling, despite popular concerns, Hobby Lobby did not take away any person’s healthcare. Nor did it take away any woman’s access to any kind of contraception—even those types the company felt were abortifacients. In fact, the Court was clear that it would not allow women or any other potentially vulnerable group to be harmed:

Under RFRA, a Government action that imposes a substantial burden on religious exercise must serve a compelling government interest, and we assume that the HHS regulations satisfy this requirement . . . As this description of our reasoning shows, our holding is very specific. We do not hold . . . that for-profit corporations and other commercial enterprises can “opt out of any law (saving only tax laws) they judge incompatible with their sincerely held religious beliefs.” . . . Nor do we hold . . . that such corporations have free rein to take steps that impose “disadvantages . . . on others” or that require “the general public [to] pick up the tab.” And we certainly do not hold or suggest that “RFRA demands accommodation of a for-profit corporation’s religious beliefs no matter the impact that accommodation may have on . . . thousands of women employed by Hobby Lobby. The effect of the HHS-created accommodation on the women employed by Hobby Lobby and the other companies involved in these cases would be precisely zero. Under that accommodation, these women would still be entitled to all FDA-approved contraceptives without cost sharing . . . .

Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751, 2782 (2014) Hobby Lobby was a narrow ruling because it represented the rare case with no losers under the Court’s ruling, the religious rights of the corporate owners were respected, and the employees received everything they were entitled to.

As to the bigger issue—whether the ruling would open the door for all kinds of discrimination—again the opinion spelled out why this result would not and could not happen: because RFRA, as it stands, is a balanced statute. For a company to get a religious exemption, it must first demonstrate a sincerely held religious belief. This requirement likely means that, before we even have a case, a set of shareholders must agree to run the corporation under the same religious belief system. Most companies are not run this way, but for those that are, we would proceed to step two: the law in question would have to substantially burden a religious belief of the company. One could easily imagine a company that wanted to discriminate organizing itself in a way that would demonstrate a sincere belief in religiously based discrimination which would be substantially burdened by workplace anti-discrimination laws.

Here is the crux though: that desire would not matter, and the company would still not be able to discriminate.

As the Court made abundantly clear in Hobby Lobby, the third and fourth parts of the test ask: (1) whether the government has a compelling interest in the goal it is trying to further with that law; and (2) if there is no other way to further that interest, then the government wins despite any religious claims. For example, even if a company had a sincere religious belief in racial discrimination, RFRA would provide it no shield. As Justice Alito explained, “The Government has a compelling interest in providing an equal opportunity to participate in the workforce without regard to race, and prohibitions on racial discrimination are precisely tailored to achieve that critical goal.”

Of course, the real worry was never about racial discrimination; RFRA could not be used that way because Title VII already clearly established that the Government “has a compelling interest in providing an equal opportunity to participate in the workforce without regard to race.” The real question was about LGBT groups, who are not yet members of a protected class, and whether RFRA, and Hobby Lobby, would provide a shield to discriminate against them.

While that is a legitimate concern, it seems more of a criticism of Congress rather than the Hobby Lobby decision. Congress is likely not rushing to enshrine an LGBT protected class. However, just last year, the Sixth Circuit Court of Appeals in EEOC v. R.G. &. G.R. Harris Funeral Homes became the third circuit to rule that Title VII’s bans against workplace discrimination also include discrimination against the LGBT community. The Supreme Court is expected to rule on this issue soon but, in the meantime, this result means that these courts actually read Hobby Lobby as making it explicitly harder to discriminate against LGBT people, not easier.

In short, almost five years later, Hobby Lobby continues to do what it did on day one: not much at all. It allows religious people protections when no one else is going to get hurt, and that is how our employment laws are supposed to function.

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Dr. Mark Goldfeder (mark.aaron.goldfeder@emory.edu) is the Director of the Restoring Religious Freedom Project at Emory University in Atlanta, Georgia.