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U.S. Supreme Court Rejects Birth Control Mandates for Closely Held Corporations

06/30/2014 -Closely held corporations cannot be required to provide contraceptive coverage for their employees, the U.S. Supreme Court ruled Monday morning. The Court held that the Religious Freedom Restoration Act (RFRA) applies to regulations that govern the activities of closely held for-profit corporations and that contraception mandates targeting them violated that law.

The ruling stems from two cases involving family owned corporations Hobby Lobby, a chain of craft stores; Mardel, a chain of book stores owned by the same owners of Hobby Lobby; and Conestoga Wood Specialties, which makes wood cabinets; all which challenged the Affordable Care Act�s mandate for for-profit corporations to provide contraceptive coverage for employees.

The corporations were willing to provide coverage for some contraceptives, such as condoms and some forms of birth control pills, but objected to covering emergency contraceptives�like Plan B and Ella�and intrauterine devices. The owners of the corporations claimed that because of their Christian values, they believe that �life begins at contraception and that it would violate their religion to facilitate access to contraceptive drugs or devices that operate after that point.�

Each company filed suit against the government basing their argument on the RFRA, which was passed in 1993 and signed into law by President Bill Clinton. The RFRA prohibits the government from �substantially burdening� a person�s exercise of religion, even if the burden results from a rule of �general applicability.� Exceptions to this are if the government demonstrates that the burden furthers a compelling government interest�such as public safety� and is the least restrictive means of furthering that interest.

In contrast, the U.S. Department of Health and Human Services (HHS) argued that the companies could not sue because they are for-profit corporations and that their owners cannot sue because the regulations apply only to the companies. HHS also held that the RFRA does not apply to Conestoga, Hobby Lobby, and Mardel because as corporations, they cannot exercise religion.

Through a series of court proceedings, the cases reached the U.S. Supreme Court, which chose to rule on them jointly and in favor of the corporations. In a 5-4 decision, the Court ruled that the Affordable Care Act�s mandate that required family-owned corporations to pay for insurance coverage for contraception violated the RFRA. Associate Justice Samuel Alito wrote themajority opinion for the Court and was joined by Chief Justice John Roberts and associate justices Antonin Scalia, Anthony Kennedy, and Clarence Thomas.

In his opinion, Alito wrote that requiring closely held for-profit corporations to provide contraceptive coverage placed a substantial burden on the companies involved. �It requires [the owners] to engage in conduct that seriously violates their sincere religious belief that life begins at contraception,� he explained. �If they and their companies refuse to provide contraceptive coverage, they face severe economic consequences� through millions of dollars in fines and fees.

Furthermore, requiring closely held for-profit corporations to provide contraception coverage would �leave merchants with a difficult choice: give up the right to seek judicial protection of their religious liberty or forgo the benefits of operating as corporations,� Alito wrote. �RFRA�s text shows that Congress designed the statute to provide very broad protection for religious liberty and did not intend to put merchants to such a choice.�

Instead, the Court ruled that the purpose of extending rights to corporations through the RFRA is to protect the rights of people associated with the corporation, including shareholders, officers, and employees. �Protecting the free-exercise rights of closely held corporations thus protects the religious liberty of the humans who own and control them,� Alito explained.

The Court also threw out HHS�s argument that for-profit corporations cannot exercise religion. Alito wrote that HHS has conceded that a non-profit corporation can be a �person� under RFRA and exercise religion. This cancels out any argument that the same cannot be said of for-profit corporations. �No conceivable definition of �person� includes natural persons and non-profit corporations, but not for-profit corporations,� he added.

�Any suggestions that for-profit corporations are incapable of exercising religion because their purpose is simply to make money flies in the face of modern corporate law,� Alito further wrote. �States, including those in which the plaintiff corporations were incorporated, authorize corporations to pursue any lawful purpose or business, including the pursuit of profit in conformity with the owners� religious principles.�

The Court also backed its opinion by saying that the federal government had failed to satisfy the RFRA�s least-restrictive-means standard. �HHS has not shown that it lacks other means of achieving its desired goal without imposing a substantial burden on the exercise of religion,� Alito said. �The government could�assume the cost of providing the four contraceptives to women unable to obtain coverage due to their employers� religious objections. Or it could extend the accommodation that HHS has already established for religious nonprofit organizations to non-profit employers with religious objections to the contraceptive mandate.�

Despite ruling in favor of the corporations on the contraceptive mandate, the Court made to narrow the effect of its opinion on other possible religious objections employers might have for insurance coverage. �This decision concerns only the contraceptive mandate and should not be understood to hold that all insurance-coverage mandates for vaccinations or blood transfusions must necessarily fall if they conflict with an employer�s religious belief,� Alito wrote. �Nor does it provide a shield for employers who might cloak illegal discrimination as a religious practice.�