Marty Lederman: How to Understand Hobby Lobby: Live from La Farine CXXVI: March 25, 2014

Marty Lederman: How to understand Hobby Lobby: "It is hard to recall a Supreme Court case that has been so commonly misunderstood,

in so many respects, as... Sebelius v. Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. v. Sebelius.... Lower court opinions... as well as a majority of the more than eighty briefs filed in the Supreme Court, have been devoted to a question... whether corporations... can exercise religion in a way protected by the Religious Freedom Restoration Act... that is, at best, a distraction.... Those opinions and briefs also repeatedly mischaracterize the relevant statute and regulations... failed to critically examine the facts.... And, contrary to what the plaintiffs and many lower courts have argued, it is untrue that the government’s compelling interests are undermined by an alleged vast network of exemptions that will leave “millions” of women unprotected....

(1) The plaintiffs in these cases are seeking a type of religious exemption that has virtually no precedent... fail to cite a single case, apart from the current contraception coverage litigation, in which a court has held that either the Free Exercise Clause or RFRA entitled a for-profit commercial enterprise to an exemption from a generally applicable law by virtue of a burden on the religious exercise of the employer or its owners, managers, or directors. And whenever such a case has reached the Supreme Court – including Braunfeld v. Brown (1961), Newman v. Piggie Park Enterprises, Inc. (1968), and United States v. Lee (1982) – the Court has overwhelmingly or unanimously rejected it.... This unbroken history is hardly surprising, given that in virtually every such case – and even in cases where nonprofit commercial enterprises seek religious exemptions... a religious exemption would require customers, employees, or competitors to bear a heavy cost in the service of another’s religion.... Of course, the fact that no court has ever afforded a for-profit employer a religious exemption at the expense of its employees does not necessarily mean that there should never be such a case. But if the Court were to do so here, it would surely be a groundbreaking departure from the judiciary’s (and Congress’s) historical practice, one that could pave the way for religious exemption claims by large commercial enterprises with respect to many other statutes, including nondiscrimination requirements, zoning regulations, taxes, and so on....

It is a category error to view the regulations at issue here as some form of simple employer-to-employee wealth redistribution, as Hobby Lobby insinuates: Employee health insurance is part of the compensation an employer offers to its employees in exchange for the value of their labor; it is not tendered gratuitously, but instead as a substitute for earned wages. In this respect it is no different from an employer’s (federally required) payment of minimum wages, or Social Security. Hobby Lobby’s rhetoric notwithstanding, there is no robbery going on.... Moreover, it is also an error to view the contraception rule as a regulation of employers.... The requirement at issue is that health insurance plans include coverage of certain contraceptive services. That requirement is not unique to plans offered by large employers, or even to employer plans generally.... It is merely one of many requirements that federal law has now established as a baseline for all such plans, including, for example, that plans not discriminate against pre-existing conditions; that plans protect beneficiaries’ children through age twenty-six; and that plans provide “cost-free” coverage (i.e., not subject to any co-payment) for many essential services, including preventive services such as colorectal cancer screening, preventive infant care, and certain immunizations....

(2) There is no “employer mandate” to offer employee health plans.... Employers, both large and small, may lawfully decline to offer such plans.... And in such a case the employees will hardly be out of luck:  They will then be able to purchase affordable health insurance on an exchange – with generous government subsidies, if necessary – and the insurance plans they purchase will meet all the applicable federal standards, including contraception coverage.... If an employer does not wish to include all the incidents of insurance that federal law requires be included in all plans, its option is not nearly as draconian as having to reduce its workforce to fewer than fifty... or face bankrupting fines:  It has the much less draconian legal option of increasing its employees’ wages in lieu of such insurance coverage...