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.”
Yet another appeals court has issued an opinion about a for-profit corporation’s challenge to the contraceptive mandate of the Affordable Care Act. The mandate requires employee health care plans to contain preventive care coverage that includes FDA-approved contraceptive methods and sterilization procedures. This time, the D.C. Circuit ruled in Gilardi v. HHS that the Gilardis, two Catholic brothers who own Freshway Foods and Freshway Logistics and oppose contraception, sterilization and abortion, are entitled to a preliminary injunction because they are likely to succeed on their claim that the mandate violates their free exercise rights as well as the Religious Freedom Restoration Act (RFRA), which prohibits the federal government from “substantially burden[ing] a person’s exercise of religion.” The D.C. Circuit’s action is consistent with the Tenth Circuit’s ruling that the arts-and-crafts chain Hobby Lobby demonstrated that the mandate substantially burdened its exercise of religion, but at odds with rulings against secular, for-profit companies and for the government by the Third and Sixth Circuits.
One aspect of Gilardi is distinctive. Although the Third and Sixth Circuits, ruling for the government, decided that for-profit, secular corporations cannot exercise religion under either the Free Exercise Clause or RFRA, the Tenth Circuit, in support of Hobby Lobby, determined that such corporations are persons who can exercise religion under RFRA. The D.C. Circuit offered a hybrid. Although two judges – Janice Rogers Brown and A. Raymond Randolph – ruled that the Freshway Companies are not persons under either the Free Exercise Clause or RFRA, they nonetheless held that the Gilardis could bring suit because the Freshway Companies are closely held corporations with only the two brothers as owners and shareholders. In that context, the court decided, the brothers suffered a concrete and personal injury and could likely prove that their religion was substantially burdened by the mandate.
The diverse circuit court rulings risk turning the contraceptive mandate issue into a debate over corporate form and institutional rights. If corporations engage in speech under the First Amendment – Citizens United – why can’t they exercise religion?
This morning, the Supreme Court heard oral arguments in Town of Greece v. Galloway, a First Amendment challenge to a New York town's practice of solemnizing its local board meetings with Christian prayer. The argument revealed the weak constitutional footing on which the town stands when it argues that it may invite local clergy, the vast majority of whom are Christian, to deliver official invocations that are overwhelmingly Christian. It also served as a stark reminder of how the Supreme Court has failed citizens who are non-believers when it comes to this issue.
Posing the first question of the day, Justice Kagan asked whether similar official prayers would be permissible at Court sessions or congressional hearings. The town's lawyer responded in the only way a reasonable person could. He conceded that such prayers – those that invoke explicitly Christian beliefs – would indeed be unconstitutional, but argued that the town's prayers were different because they reflect a long history of legislative prayer, which includes state legislatures and the First Congress. Pressed further by Justice Kennedy to provide a justification for the prayers other than tradition, the town's lawyer, not surprisingly, came up short.
In fact, as the ACLU argued in its friend-of-the-court brief, tradition -- standing alone -- is a poor reason for flouting a fundamental principle of the Establishment Clause of the First Amendment: The government should remain neutral on matters of faith and may not promote religion over non-religion. When elected officials violate this maxim by imposing official prayer at meetings, especially local governmental meetings, it casts those who don't subscribe to the promoted beliefs as outsiders, second-class citizens who must pay a steep price in spiritual terms for daring to exercise the right of participatory democracy.
The government shutdown may have ended, but the hardline conservative attack on the Affordable Care Act hasn’t. In the coming months, the Supreme Court will decide whether to hear challenges brought by secular, for-profit corporations and their owners to a key provision of the ACA that requires certain employers to provide female employees with health insurance that covers all FDA-approved contraceptives. The ACA already exempts religious employers from the duty to provide contraceptive coverage, but these secular, for-profit corporations insist they are entitled to exemption as well. In its own challenge earlier this year, Hobby Lobby, an arts and crafts chain, succeeded in persuading the United States Court of Appeals for the Tenth Circuit to accept a truly remarkable proposition: that the corporate entity itself is a person exercising religion and is entitled, on grounds of religious conscience, to deny its female employees health insurance coverage for FDA-approved contraceptives. Two other federal circuits have rejected this analysis, and the Supreme Court has been asked to resolve the split between the federal courts of appeal. If, as is widely expected, the Court agrees to hear Hobby Lobby, the case will be vitally important on a broad range of issues: corporate personhood and the rights of business corporations, women’s health, employee rights, the role of religion in the workplace and more.
In the 225 years since the ratification of the Constitution, the Supreme Court has never held that secular, for-profit corporations are entitled to the Constitution’s protection of the free exercise religion. As we explain more fully in this legal brief and issue brief, it should not do so now.
From the Founding on, the Constitution’s protection of religious liberty has always been seen as a personal right, inextricably linked to the human capacity to express devotion to a God and act on the basis of reason and conscience. Business corporations, quite properly, have never shared in this fundamental aspect of our constitutional traditions for the obvious reason that a business corporation lacks the basic human capacities – reason, dignity, and conscience – at the core of the Free Exercise Clause. No decision of the Supreme Court, not even Citizens United, has ever invested business corporations with the basic rights of human dignity and conscience. To do so would be a mistake of huge proportions, deeply inconsistent with the text and history of the Constitution and the precedents of the Supreme Court.