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Without Precedent: Hobby Lobby and the Corporatization of Religious Freedom

The controversial Supreme Court decision turns on a hotly debated question: who is a “person” under the Religious Freedom Restoration Act of 1993?

Photo by Nicholas Eckhart (Flickr).

On June 30, 2014, the United States Supreme Court decided Burwell v. Hobby Lobby Stores, Inc. (PDF).  Released on the last day of the Court’s session prior to its summer break, it was perhaps the most highly anticipated decision of this term.

The Court joined two cases in its decision: Burwell v. Hobby Lobby Stores, Inc., and Conestoga Wood Specialties Corp. v. Burwell (collectively “Hobby Lobby”).  Both cases challenged the contraceptive mandate to the Affordable Care Act (“ACA”), which requires health plans to cover “[a]ll Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity” at no shared cost to the beneficiary.

 Through their separate lawsuits, the Greens and the Hahns challenged the ACA’s contraceptive mandate because it requires them to provide health insurance coverage for four FDA-approved contraceptives that they oppose.

Some health insurance plans were already exempt from certain portions of the ACA, including the contraceptive mandate, prior to the Court’s ruling.  Health insurance plans and policies that existed before March 23, 2010 and had not since changed to greatly reduce benefits or increase beneficiaries’ costs were considered “grandfathered.”  Certain employers with religious objections to contraceptives, such as churches, as well as some non-profit religious organizations, such as hospitals, were also exempt from the mandate.  Closely held corporations such as Hobby Lobby and Conestoga were required to cover women’s preventive care, including contraceptives.

Hobby Lobby Stores, Inc., (“Hobby Lobby”) is a nationwide arts and crafts supply chain.  Founded in 1970 by David Green, Hobby Lobby now operates 575 stores and employs more than 13,000 people.  David, his wife Barbara, and their three children still own and control Hobby Lobby and Mardel Christian & Education, an affiliated chain of Christian bookstores founded by one of the Greens’ sons.  Both Hobby Lobby and Mardel are for-profit corporations organized under Oklahoma law.

The Greens are Christians.  On its website, Hobby Lobby commits to “[h]onoring the Lord in all we do by operating the company in a manner consistent with [B]iblical principles.”  Hobby Lobby and Mardel stores are closed on Sundays so that employees and customers may have “more time for worship and family.”  Every year on Easter Sunday, the Fourth of July, and Christmas Day, the corporations pay for full-page Christian message advertisements in newspapers such as the New York Times and USA Today.

Brothers Norman and Sam Hahn started Conestoga Wood Specialties Corporation (“Conestoga”) in their garage in 1964.  The woodworking and cabinetry business has since expanded and now employs more than 1,000 people in five manufacturing plants across the country.  Norman, his wife Elizabeth, and their three sons maintain sole ownership of the company.  The Hahns are Mennonites and profess that their “ethics and values are founded on the Christian principles that influence the way [they] do business.”  Conestoga is organized as a for-profit corporation under Pennsylvania law.

Both the Green and Hahn families believe that life begins at conception.  As such, they oppose abortion and certain forms of contraceptives that they believe are abortifacients.  Through their separate lawsuits, the Greens and the Hahns challenged the ACA’s contraceptive mandate because it requires them to provide health insurance coverage for four FDA-approved contraceptives that they oppose.

RFRA forbids the federal government from passing laws that substantially burden a person’s free exercise of religion, unless doing so furthers a compelling governmental interest through the least restrictive means available.

The Court held that the contraceptive mandate violates the Religious Freedom Restoration Act of 1993 (“RFRA,” or alternatively “the Act”) when applied to closely held corporations such as Hobby Lobby and Conestoga.  Authored by Justice Samuel A. Alito, Jr. (“J. Alito”), the majority opinion has already proven extremely polarizing.

RFRA forbids the federal government from passing laws that substantially burden a person’s free exercise of religion, unless doing so furthers a compelling governmental interest through the least restrictive means available.  The Act was proposed in response to the Supreme Court’s controversial 1990 ruling in Employment Division, Department of Human Resources of Oregon v. Smith (“Smith”).  In that case, two members of the Native American Church were denied unemployment benefits after they were fired from their jobs for ingesting peyote as part of a religious ceremony.  The Court held that a “generally applicable and otherwise valid” law does not violate the First Amendment’s Free Exercise Clause when “prohibiting the exercise of religion . . . is not the object . . . but merely the incidental effect.”

Noting that “laws ‘neutral’ toward religion may burden religious exercise as surely as laws intended to interfere with religious exercise[,]” Congress found that the Smith holding “virtually eliminated the requirement that the government justify burdens on religious exercise imposed by laws neutral toward religion[.]”  By enacting RFRA in 1993, Congress mandated a return to the Court’s prior Free Exercise Clause jurisprudence, which favored a balancing test of competing personal and governmental interests.  Yet because it requires a least-restrictive means test, RFRA went further to protect religious exercise than had prior case law.

Religious freedom received even more protection when the RFRA definition of “religious exercise” changed with the passage of the Religious Land Use and Institutionalized Persons Act of 2000 (“RLUIPA”).  RLUIPA amended RFRA to broaden the scope of the term “religious freedom.”  The original definition, “the exercise of religion under the First Amendment,” was replaced with “any exercise of religion, whether or not compelled by, or central to, a system of religious belief.”

RFRA evinces Congress’s disapproval of the Court’s decision in Smith, which was widely viewed as harsh and anti-religion.  The Act protects religious freedom beyond that which the First Amendment requires.  It does not, however, go so far as to confer religious rights upon a corporation, as J. Alito presumes.

 Despite clear legislative intent to the contrary, J. Alito finds these laws show “an obvious effort to effect a complete separation from First Amendment case law[.]”

According to Congress, RFRA exists to restore the Court’s prior treatment of Free Exercise cases and require the compelling interest test when the free exercise of religion is substantially burdened.  Further, the House Committee Reports during the passage of RLUIPA state that the “religious exercise” definition was amended to answer questions posed by previous RFRA cases.  Although not a “central” religious belief, building a church is, nonetheless, the exercise of religion, said Congress.

Despite clear legislative intent to the contrary, J. Alito finds these laws show “an obvious effort to effect a complete separation from First Amendment case law[.]”  He argues that there is no textual evidence that Congress intended courts to look to prior precedent in construing the phrase “religious exercise,” even though the Act’s text and legislative history specifically reference pre-Smith jurisprudence.  Through this dubious argument, the majority is able to largely sidestep Free Exercise Clause case law and hold that RFRA applies to corporations.

RFRA protects a person’s religious exercise.  Do corporations constitute persons who may bring suit for RFRA violations?  The majority cites the Dictionary Act definition of “person,” which includes corporations and other entities, in holding that they do.  However, as Justice Ruth Bader Ginsburg (“J. Ginsburg”) notes in the main dissent, the Dictionary Act is instructive only when context is not.  Whether the context is Free Exercise Clause or RFRA, no case precedent supports the notion that corporations are persons with religious rights.

 Religious freedom is an inalienable right to worship whomever one pleases, or to worship no one at all. Most significantly, it is an individual right ill-suited to the corporate context.

The Bill of Rights was drafted to protect individuals.  The notion of corporate personhood is easily digestible with regards to some of its basic protections, regardless of whether the Dictionary Act governs within a given context.  In its 2008 Citizens United v. Federal Election Commission decision, the Supreme Court held that corporations have political speech rights under the First Amendment.  However, this holding in no way confers other First Amendment rights to such entities.  As J. Ginsberg notes, “by law, no religion-based criterion can restrict the work force of for-profit corporations.”  Nor is political speech congruent to the exercise of religion in the corporate context: there is an undeniable difference between a corporation that publicly supports a political candidate and one whose company-wide benefits are determined by the religious beliefs of its executives.

Religious freedom is one of the tenets upon which our country was founded.  It is an inalienable right to worship whomever one pleases, or to worship no one at all.  Most significantly, it is an individual right ill-suited to the corporate context.

Liles Demmink, Former Associate Editor/Ethics
About Liles Demmink, Former Associate Editor/Ethics (12 Articles)
Liles Demmink served as the Associate Editor of Ethics for the Campbell Law Observer during the 2014-2015 school year. She graduated from the University of North Carolina at Chapel Hill in May 2009 with a degree in Journalism and Mass Communication. Post-graduation, Liles moved to Boston, MA, where she worked for a marketing consulting firm until she returned to NC to attend law school. During the summer of 2013, Liles interned with the Honorable Ann Marie Calabria of the North Carolina Court of Appeals. Liles also served as a Legal Research and Writing Scholar at Campbell. She graduated from Campbell Law School in May 2015.
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