by Frederick Mark Gedicks, Guy Anderson Chair and Professor of Law, Brigham Young University
* This is the second in a series of posts on the two “contraception mandate” cases on which the Supreme Court recently granted certiorari review, Hobby Lobby Stores, Inc. v. Sebelius (10th Cir. June 27, 2013) and Conestoga Wood Specialties Corporation v. Sebelius (3rd Cir. July 26, 2013). Gedicks’ first post is available here.
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). Forbes estimates its annual revenue at substantially more than $2 billion.