Since last October, legal experts and business leaders have been watching and waiting for the U.S. Supreme Court to hand down their decision just about the most high-profile business law cases lately.
Late in June, on the very last day from the current term. our prime court published its its ruling in Burwell v. Hobby Lobby. The issue: whether a closely-held, for-profit corporation could refuse based on the private owners’ personal religious convictions against birth control, to provide contraception coverage to its employees as mandated from the federal regulations if the 2010 Affordable Care Act. With a razor-thin, 5-4, majority vote, the Supreme Court answered that it could.
The four dissenting justices disagreed, strenuously, for both the result and the rationale. However, the public and media attention that has been presented to this significant Supreme Court opinion has almost overshadowed the reality that – for many small, and mid-sized businesses – it is going to have zero impact in any way.
The Decision in a Nutshell – Two families, the Hahns and the Greens, own a total of three companies. The Hahns and their children own and control Conestoga Wood Specialties (cabinets), as the Greens as well as their children own and control all the Hobby Lobby opening times. Among the Greens’ sons also owns an affiliated Christian bookstore chain.
Though these for-profit businesses meet the meaning of “closely held” corporations which is, (five or fewer shareholders) they may be hardly what a lot of people would consider to be small companies. The Hobby Lobby chain operates some 500 locations nationwide with almost 13,000 employees. The bookstore firm, Mardel, has about 35 stores and some 400 employees. Conestoga has about 950 employees.
The families argued that the Health & Human Services Department regulations mandating birth control coverage violated their rights under the federal Religious Freedom Restoration Act and also the First Amendment. Among the many, complex issues decided was whether a for-profit company could “participate in religious exercise.”
Five in the justices (Kennedy, Roberts, Scalia, Thomas, and Alito) ruled these families’ rights are violated by the contraception mandate, that it “substantially burdened their exercise of religion,” and that HHS “had not demonstrated a compelling fascination with enforcing the mandate against them,” or proved that this mandate was the “least restrictive means” of furthering a compelling governmental interest.
Justice Samuel Alito, writing for that majority, revealed that this ruling “… put on closely held corporations” and, in a concurring opinion, Justice Anthony Kennedy noted that it is supposed to have been a narrow in scope.
Why Many Businesses Will Likely Be Unaffected By This Ruling. Legally, this decision fails to affect the vast majority of American businesses and, particularly, on family-owned firms. First, there is not any “employer mandate” in any way under the Affordable Care Act for just about any business with less than 50 employees. These firms are already exempt and have no requirement to offer workers with any medical insurance coverage at all. Furthermore, as the great greater part of small enterprises in the United States (about 78%) are family owned, only about 2 percent of small companies have 50 or more employees.
So, for the majority of closely held corporations, this Supreme Court case, however newsworthy, will not be relevant. Second, even before the passage and implementation from the Affordable Care Act, the majority of businesses, including small and midsized firms, already offered the mandated contraceptive coverage. Over 70% of U.S. employers not connected to religious institutions included birth control in their company health plans. Even for businesses with less than 200 employees, that figure was over 60%.
Third, the Affordable Care Act already exempts religious for-profit corporations as well as nonprofit corporations out of this coverage mandate.
For Affected Companies, You will find Broad Implications – This ruling will affect a fairly small number of closely held corporations whose private owners decide to assert that they hold “sincerely held religious beliefs” against contraception. However, wjdqpc Court’s majority opinion is not really exactly clear how these religious convictions have to be measured or proved.
In her own blistering dissent, Justice Ruth Bader Ginsburg predicted this opinion could eventually allow “businesses to opt from any law (saving only tax laws) they judge incompatible using their sincerely held religious beliefs.”
Other critics, including many legal experts, are involved about its broader implications, and the things they describe as being a “slippery slope” of possible religious challenges to a wide array of government regulations.