The 16 Biggest Controversies in Hobby Lobby’s Five Decade History

If a story is labeled “All Rights Reserved,” we cannot grant permission to republish that item. But government statisticians don’t keep track of companies that way. 157 See Catechism of the Catholic Church § 2030 (1994) (“It is in the Church, in communion with all the baptized, that the Christian fulfills his vocation. From the Church he receives the Word of God containing the teachings of ‘the law of Christ.’ From the Church he receives the grace of the sacraments that sustains him on the ‘way.’” (footnote omitted)). 112 See, e.g., NLRB v. Catholic Bishop of Chi., 440 U.S. 490 (1979) (recognizing Free Exercise Clause as applying to a religious corporation); Kedroff v. Saint Nicholas Cathedral of Russian Orthodox Church, 344 U.S. 94 (1952) (same).

  1. Since the company is owned by the family of the founder and CEO David Green, it’s a private company.
  2. Hobby Lobby is expected to go public for the reason of the stock rising in anticipation of the potential merger.
  3. As explained in note 81, supra, we disclaim any reliance upon the business judgment rule to support this essay’s arguments.

In 2013, the company and its owners were involved in a similar case in Colorado, where they refused for religious reasons, to provide services that required them to supply emergency contraception. Stock symbols are used to track the progress of publicly-traded companies on the stock market, so the investors can know how the business is doing. Hobby Lobby doesn’t have a stock symbol because the company is not publicly traded.

Supreme Court likely to discard Chevron

See WARD, supra note 58, at XIV-42–43 (explaining operation of this provision and opining that it will be most attractive for family owned corporations); infra note 80 and accompanying text (discussing Delaware statute confirming that a corporate charter may properly confer on shareholders the management prerogatives of partners). The examples above are inconsistent with the claim that an impermeable barrier prevents shareholders from mixing commercial and religious objectives. The largely contractual nature of corporate law explains the existence of such businesses. Investors may alter default rules in various ways that contradict the essentialist version of the for-profit corporation invoked by the scholars’ brief. Part I of this essay provides background on RFRA and the debate over for-profit corporations.

So, the number of women who were potentially going to not have coverage for their contraception was very large. The ruling may also be significant for certain religious-affiliated non-profit employers who are operating under the accommodation discussed above. By identifying the accommodation as a less restrictive alternative, the Court may be signaling it believes that the exception HHS provided them suffices to meet any concerns they may have.

Corporations are just means by which groups of people pursue common purposes, and acknowledging the exercise of religion by for-profit corporations is by no means a category mistake. Nor, given that corporations can be formed for “any lawful purpose,” do shareholders violate some social compact by accepting the benefits of the corporate form while pursuing both profits and religious values. Of course, granting religious exemptions from otherwise applicable laws raises the risk of opportunism and can undermine important governmental policies. These risks are present with natural persons as well, however. RFRA deals with these concerns not by narrowing the definition of “person,” but instead by scrutinizing only those burdens on religious exercise that are substantial and allowing compelling interests to justify such burdens in appropriate cases.

Imposition of religious beliefs onto others

In closely held corporations with a single shareholder, the structure for many religious businesses, the fear of such litigation is especially fanciful. Even if such decisions did lead to occasional litigation, the mere possibility of corporate conflict would provide no reason for prohibiting corporate religious exercise. On matters ranging from business plans to corporate social responsibility (or its absence), corporations often engage in controversial actions. These matters have resulted in reported cases.120 We do not prohibit, however, corporations from planning their business or from implementing corporate social responsibility programs. Rather, we provide firms with discretion and let people vote with their pocketbooks.

A closely-held corporation like Hobby Lobby that is not publicly traded, and that is owned by a small number of actual individuals, does so as well. Indeed, I will not be surprised if we see, in the coming weeks, a host of closely held corporations – and a few publicly traded ones – asserting the right to discriminate against LGBT job applicants, employees, and customers notwithstanding various state laws to the contrary. From the perspectives of evangelical Christians, Hobby Lobby is exactly about onerous conditions – about not having to give up one’s religious beliefs in order to make a living by way of the corporate form. In their view, the contraceptive mandate is a requirement that they leave their religious rights at the corporation’s gate (to paraphrase Tinker v Des Moines School District).

It seems unlikely that Monday’s ruling will settle the issues in that case; the Supreme Court could rule on it next term. We think Solicitor General Verrilli effectively challenged this contention during oral argument. The fact that a law is underinclusive often has little bearing on whether the government’s goal that it furthers is compelling. Important civil rights laws, such as Title VII (which prohibits race is hobby lobby publicly traded discrimination by employers), often exclude small businesses from their coverage. Indeed, most laws have more exceptions to them, or limitations to their applicability, than their basic purposes might suggest. It is common for government to serve very important interests while moving forward in a piecemeal fashion to accommodate other non-trivial interests, particularly when it is breaking new regulatory ground.

responses to “The Narrow (and Proper) Way for the Court to Rule in Hobby Lobby’s Favor”

The existential and definitional assumption is that corporations will obey the law and not be claiming legal waivers unavailable to their competitors. Hobby Lobby, as I’m sure you know, involved a large chain of craft stores that was owned by the Green family. The Green family has objections to certain contraceptive devices, but under the Affordable Care Act, employers have to provide their employees with health insurance, and that health insurance has to include all 20 FDA-approved contraceptive devices. Four of those are ones the Hobby Lobby owners believe have the potential to cause embryo destruction, so they didn’t want to fund an insurance plan that included those. And they were asking — not that they as individuals get an exemption from having to fund these methods of contraception — but instead that the corporation itself get an exemption. And they invoked as the legal hook for their plea the Religious Freedom Restoration Act.

But I think that question is one that needs to figure centrally in judicial deliberations about this. If courts are made to think about how much of a burden they impose on other people by granting an exemption, and if they’re also given guidance that they shouldn’t impose too much of a burden on third parties, then I think we create a stopping point. And the stopping point becomes, no, we can’t give you this exemption, because if we give it to you, it’s going to unfairly burden these other people.

Court Ruling Geared To ‘Closely Held’ Firms, But What Is That?

But here is where corporate law assumptions should have led the Court to reach the opposite outcome in Hobby Lobby itself. Whether choosing the corporate form is a burden on the rights of business people’s rights cannot be determined in a vacuum. Rather, the best way to answer the question is whether the nature of the government benefit – the corporate form – is best seen as closely connected to the exercise of shareholders’ religious beliefs. Green was a staunch opponent of the Obamacare mandate that employers provide health insurance that includes birth control and reproductive care.

Nothing in the rationale for limited liability, furthermore, provides a reason for limiting the ability of a firm’s owner to use the corporation as a vehicle for religious activity. No one, for instance, claims that sole proprietors who bargained with all creditors for limited liability would thereby create a barrier that prevented them from using their business to further religion. Metaphors aside, whether a particular shareholder’s personal assets (if any) are available to satisfy the firm’s creditors seems normatively irrelevant to shareholders’ ability to infuse corporations with their religious values. The same may be said of charter provisions imposed midstream. Granted, directors must propose such changes before a shareholder vote.67 However, in closely held firms, directors and shareholders are often one and the same.68 Moreover, shareholders may simply elect directors who promise to propose such amendments. Here again, a straightforward application of garden-variety corporate law empowers shareholders to employ the corporation as a tool for furthering their religious beliefs.

What about the employees?

One of the long-term factors that has left our culture unable to understand the kind of claim being made by Hobby Lobby has been the failure of so many churches to teach that business is a vocation. In fact, all businesses without exception are moral, culture-making enterprises. Business is human action, and human action is always morally and culturally grounded—and formative. If you’re looking for an alternative to the chain store, there are a few other craft stores that you can check out.

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