Most discussions of whether Hobby Lobby and Conestoga Wood are protected by the Religious Freedom Restoration Act (RFRA) as corporations have focused on their for-profit character. This is something of a red herring; for-profit character matters, but not in the way most people think. As law professors Micah Schwartzman, Richard Schragger and Nelson Tebbe have pointed out (see here and here), what disqualifies a corporation from RFRA protection is as much its size as its for-profit character.
The corporate plaintiffs in Hobby Lobby, for example, insist that they “believe” and “practice” the religion of their owners because they are “family businesses” and “closely held” corporations that have very few shareholders. This self-description evokes the stereotypical image of the small-town “mom-and-pop” grocery store, staffed mostly by an extended family whose members greet everyone by name and whose customers, suppliers and other employees uniformly identify as the “real” owners irrespective of legal formalities.
Federal laws are frequently sensitive to the needs of such genuinely small businesses. For example, Title VII of the Civil Rights Act exempts businesses with fewer than 15 employees, and the Fair Housing Act similarly does not apply to small apartment complexes where the owner resides on the premises. The ACA itself exempts businesses with fewer than 50 employees from the employer mandate to provide employee healthcare insurance.
The corporations here are light years away from the “mom-and-pop” stereotype. Hobby Lobby and its affiliates employ 13,400 people in 600 locations scattered through 39 states (including a 3.4 million square foot headquarters complex). Forbesestimates its annual revenue at substantially more than $2 billion.
Last week the U.S. Supreme Court agreed to review two lower court decisions involving for-profit businesses seeking religious exemptions from the Affordable Care Act’s so-called “contraception mandate.” The mandate requires that employer healthcare plans cover all FDA-approved contraception without “cost-sharing”—that is, without a copayment or other out-of-pocket patient expense beyond the monthly plan premium. Churches and other “houses of worship” are fully exempt from the mandate, and there is a regulatory accommodation for religious nonprofits like religiously affiliated colleges and hospitals, which excuses them from complying with the mandate so long as they certify that compliance violates the tenets of their affiliated religion.
For-profit employers whose religious beliefs condemn the use of some or all of the mandated contraceptives have challenged the mandate under the Religious Freedom Restoration Act (RFRA), which prohibits the federal government from imposing a “substantial burden” on a person’s religious practices unless it is pursuing an exceptionally important goal that it cannot accomplish in another way. These employers are claiming that RFRA grants them the same kind of exemption as has been granted to churches, synagogues, and other religious congregations, even though they are unambiguously secular enterprises like craft stores, auto parts manufacturers, construction companies, and medical supply businesses. (I examined the weaknesses in these cases in an ACS Issue Brief last fall).
One of the mandate decisions the Court will review, Hobby Lobby Stores, Inc. v. Sebelius(10th Cir. June 27, 2013), decided that a for-profit corporation that operates a nation-wide chain of craft stores is a “person” who “exercises religion” under RFRA and thus is entitled to its protections. The other decision, Conestoga Wood Specialties Corporation v. Sebelius(3rd Cir. July 26, 2013) went the other way, finding that a for-profit corporation that operates a cabinet-making business is not protected by RFRA, and additionally holding that the mandate does not violate free exercise rights protected by the First Amendment.
The D.C. Circuit’s recent decision addressing the contraception mandate – Gilardi v. United States Department of Health and Human Services – got some things right but many more things wrong. The contraception mandate is the Affordable Care Act’s requirement that health care plans, now mandatory for large employers, include all FDA-approved contraception without any cost sharing by employees.
Francis and Philip Gilardi own and manage Freshway Foods and Freshway Logistics, fresh food processing and delivery companies. The brothers are religiously opposed to contraception and argued that the mandate violates their corporations’ and their own religious rights under the Religious Freedom Restoration Act (RFRA). Under RFRA, “persons” are entitled to exemptions from federal laws that impose a substantial burden on their religious conscience unless the challenged law passes strict scrutiny. A divided panel of the D.C. Circuit held that the brothers were entitled to an exemption from the mandate under RFRA.
What the Gilardi Court got right. The Gilardi Court held that secular corporations are not “persons” capable of religious exercise and therefore cannot bring a RFRA claim. Because RFRA draws from Free Exercise Clause jurisprudence, the D.C. Circuit took the occasion to examine whether corporations had free exercise rights. It rejected such a notion, observing that the Supreme Court has never extended free exercise protection to secular corporations and “has expressed strong doubts about the proposition.” “When it comes to the free exercise of religion . . . the [Supreme] Court has only indicated that people and churches worship.”
Editor’s Note: On Tuesday, November 19, ACS held a panel discussion on constitutional protections of privacy in a time of rapid technological innovation and increasing surveillance, featuring Dahlia Lithwick of Slate, Chris Calabrese of the ACLU, Stephen Vladeck of American University Washington College of Law and others. You can watch video of the event here.
These days, according to an array of public interest groups, civil liberties appear to be taking a hit from a growing and seemingly unwieldy national security apparatus.
U.S. Director of National Intelligence James Clapper, who misled Congress on domestic surveillance, attempted to quote Casablanca at a recent hearing about surveillance abroad. “My God, there’s gambling going on here!” he joked, mocking the umbrage of Senate Intelligence Committee who are regularly offered closed-door briefings on the government’s mass surveillance programs, even if they don’t always attend.
Potential harms to privacy do not end there. For example, students of all ages are being subjected to what the headmaster of Phillips Academy calls “National Security Agency-style surveillance.” Large corporations are accepting handouts from the government in exchange for turning over sensitive information. And even journalists, historically in the vanguard of free speech fights, are suggesting tools like anonymity are “a big mistake.”
by Valerie Schneider, Assistant Professor of Law and Director of Fair Housing Clinic, Howard University School of Law
Less than one year after the Supreme Court ended its term with the gutting of the Voting Rights Act, it is clear that at least four of the members of the current Supreme Court (the number needed for a case to be heard by the highest court) are eager to limit the reach of another pillar of the Civil Rights legislation from the 1960s -- the Fair Housing Act.
In the past two years, the Supreme Court has granted certiorari in two Fair Housing Act cases, both of which would have required the Supreme Court to determine whether acts that are not intentionally discriminatory, but still have a disproportionate negative impact on minority communities, may be prohibited by the Fair Housing Act. Each of these cases -- first Magner v. Gallagher and then, just this week, Township of Mt. Holly v. Mt. Holly Gardens Citizens In Action, Inc.– settled just weeks before oral arguments were scheduled.
Those who would have liked the case to move forward argue that, unless plaintiffs can prove that a defendant harbored racial animus or intended to discriminate, the law should not recognize that discrimination has taken place. This proposition is countered by widely accepted social science, not to mention human experiences, that indicates that intent actually has very little to do with whether discrimination occurred. Regardless, to those displaced by discriminatory redevelopment decisions or lending policies, it is little comfort that the decision-makers may have had no conscious intent to cause harm based on race. What is in the mind of those engaged in discriminatory actions is of no comfort to the victims of discrimination and should be of limited import under the Fair Housing Act.