Since last October, legal professionals 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 in recent years.
Late in June, on the very last day from the current term. the high court published its its ruling in Burwell v. Hobby Lobby. The matter: whether a closely-held, for-profit corporation could refuse based on the private owners’ personal religious convictions against birth control, to offer contraception coverage to the employees as mandated through the federal regulations in the event the 2010 Affordable Care Act. By a razor-thin, 5-4, majority vote, the Supreme Court answered that could.
The 4 dissenting justices disagreed, strenuously, on the end result and also the rationale. However, the public and media attention that has been provided to this significant Supreme Court opinion has almost overshadowed the reality that – for many small and mid-sized businesses – it can do not have impact in any way.
The Decision in a Nutshell – Two families, the Hahns and the Greens, own an overall of three companies. The Hahns as well as their children own and control Conestoga Wood Specialties (cabinets), as the Greens as well as their children own and control all the Hobby Lobby closing times. Among the Greens’ sons also owns an affiliated Christian bookstore chain.
Though these for-profit businesses fulfill the concept of “closely held” corporations that is, (five or fewer shareholders) they may be hardly what most people would consider to be small businesses. The Hobby Lobby chain operates some 500 locations nationwide with almost 13,000 employees. The bookstore firm, Mardel, has about 35 stores plus some 400 employees. Conestoga has about 950 employees.
The families argued the Health & Human Services Department regulations mandating birth control coverage violated their rights under the federal Religious Freedom Restoration Act and the First Amendment. One of the many, complex issues decided was whether a for-profit company could “take part in religious exercise.”
Five from the justices (Kennedy, Roberts, Scalia, Thomas, and Alito) ruled that these families’ rights are violated by the contraception mandate, which it “substantially burdened their exercise of religion,” and this HHS “had not demonstrated a compelling desire for enforcing the mandate against them,” or proved the mandate was the “least restrictive means” of furthering a compelling governmental interest.
Justice Samuel Alito, writing for the majority, revealed that this ruling “… placed on closely held corporations” and, in a concurring opinion, Justice Anthony Kennedy noted that it is intended to be a narrow in scope.
The Reasons Businesses Will Likely Be Unaffected With This Ruling. Legally, this decision will not affect the majority of American businesses and, particularly, on family-owned firms. First, there is no “employer mandate” at all under the Affordable Care Act for virtually any business with fewer than 50 employees. These firms happen to be exempt and have no requirement to supply workers with any medical health insurance coverage at all. Furthermore, whilst the great greater part of small companies in the United States (about 78%) are family owned, only about 2 percent of small businesses have 50 or maybe more employees.
So, for many closely held corporations, this Supreme Court case, however newsworthy, is not really relevant. Second, even before the passage and implementation of 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 associated with religious institutions included birth control within their company health plans. For businesses with fewer than 200 employees, that figure was over 60%.
Third, the Affordable Care Act already exempts religious for-profit corporations as well as nonprofit corporations from this coverage mandate.
For Affected Companies, There are Broad Implications – This ruling will affect a somewhat 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 blistering dissent, Justice Ruth Bader Ginsburg predicted this opinion could eventually allow “businesses to opt away from any law (saving only tax laws) they judge incompatible using their sincerely held religious beliefs.”
Other critics, including many legal experts, are concerned about its broader implications, and whatever they describe being a “slippery slope” of possible religious challenges to a variety of government regulations.