The Supreme Court's Hobby Lobby Decision Isn't About Corporations—It's About Individuals


Nicholas Eckhart / Foter / Creative Commons Attribution 2.0 Generic

In the wake of this morning's Supreme Court's decision that the Affordable Care Act's contraception mandate does not apply to closely held corporations like Hobby Lobby, which challenged the requirement, you'll probably hear a fair amount of commentary and complaining about the religious rights of corporations. But that's not the best way to think about the decision. The language of the ruling, written by Justice Samuel Alito, emphasizes repeatedly that it's not really about corporations—it's about the individual people who own and operate those corporations.

The gist of the decision, as Reason's Damon Root explained earlier, is that Obamacare's contraception mandate, which applies to most employers with more than 50 people as part of the law's essential benefits rules, violates the 1993 Religious Freedom Restoration Act (RFRA), a law which provides that "government shall not substantially burden a person's exercise of religion even if the burden results from a rule of general applicability." Any exceptions should further a "compelling governmental interest" and be the "least restrictive means" of doing so.

The key to Alito's ruling arguably comes down to just two words: "a person's."

The big question isn't whether the contraception mandate violates the religious freedoms of some faceless corporate entity entirely separate from the individuals who own that company—it's whether the requirement would violate the free exercise of religious for the particular people who founded and now run the company.

As Alito writes in his opinion, "A corporation is simply a form of organization used by human beings to achieve desired ends….When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of these people."

In seeking to defend the requirement, the federal government had argued that Hobby Lobby, as a for-profit corporation, was not eligible to challenge the rule under the RFRA because corporations are "separate and apart from" their individual owners and operators. They were distinct, and not "people," and therefore ineligible for the protections of a law designed to shelter "a person's exercise of religion." Alito says, more or less, that this is nonsense: "Corporations, 'separate and apart from' the human beings who own, run, and are employed by them, cannot do anything at all."

It's pretty clear that complying with the contraception requirement would have violated the religious beliefs of the individuals in the small family that owns Hobby Lobby, a closely held corporation that expressly says in a statement of purpose that it is committed to "operating the company in a manner consistent with Biblical principles." (As Alito also notes, no one questioned the sincerity of their beliefs.) It's the free exercise of those individuals that the RFRA is designed to protect, and it's their individual religious freedoms that most concern Alito. The focus on these individuals, with their clearly defined religious beliefs, also suggests why the ruling might not apply to large public corporations where it is arguably much harder to pin down any individual interests.

Alito's argument isn't exactly the same as the one proposed by the Cato Institute in its amicus brief on the case, but it draws from a similar line of thinking. "The real issue in these cases," according to Cato's brief, "is whether individuals who wish to conduct their business lives in accordance with their religious beliefs forfeit the right to do so when they organize their business in the form of a corporation—in particular, a closely held corporation." Individuals who choose to organize their business affairs this way "do not check their religious values at the office door," the brief argued. Alito's opinion seems to share the sentiment when it declares that "protecting the free-exercise rights of corporations like Hobby Lobby…protects the religious liberty of the humans who own and control those companies."