So by now, many of you have heard about the Supreme Court’s decision in Hobby Lobby wherein the court ruled that forcing a closely held company to provide birth control to women (as required under Obamacare) is a "substantial burden" on the religious liberty of the organization. As I always encourage you to do here, let’s put politics and personal views aside. That being said, were you aware that companies were guaranteed access to religious freedom under the First Amendment the U.S. Constitution? Yeah, me neither.
We all know a corporation is a fictional "person". And, we also knew that the Supreme Court had decided that corporate persons have the First Amendment right to free speech in Citizens United (hence the flood of money into political campaigns these past few election cycles). One can understand how a corporation may have an interest in influencing speech. However, how can a fictitious person have any interest in religion?
According to the Court, the corporation’s right to be free from substantial burden on its religious liberty can only be applied to closely held corporations, like Hobby Lobby, where the majority owner(s) have very strong religious views. A publicly held company cannot and will not have this right.
So, how does this affect a small business owner like you?
1. Well, if you are a smart business owner, you have already incorporated your business in some way (C-Corp, S – Corp or LLC);
2. We also know that most small businesses are privately held companies (i.e. they don’t sell shares to the public);
3. If you, as majority owner of this business have very strong religious views, that means your company gets to have a constitutional right to religious liberty.
In what way is this religious liberty exception helpful to your business?
As you can see in Hobby Lobby, it may allow you to bypass certain laws and regulations:
• In the Hobby Lobby case, that company was able to bypass Obamacare’s rules that employers with 50 or more employees must provide health insurance for their employees that allows for free birth control for women.
• According to Adam Winkler, the Supreme Court left open the possibility that businesses with religious liberty exemption could get to bypass the Obamacare regulations “mandating insurance coverage for vaccinations and blood transfusions.” Though it is not a guarantee, if your religion is against these things, there is a strong possibility that you may win in court.
• Again, per Mr. Winkler, the Supreme Court made it very clear that they will NOT allow firms to use the religious liberty exemption to discriminate on the basis of race. The Court, was, however silent on whether or not it would allow privately held companies to use this religious exemption as a way to bypass laws protecting and providing equal opportunity for LGBT citizens.
• Hobby Lobby is already being used by religious organizations who wish to get a “religious exemption to President Obama’s planned executive order barring federal contractors from discriminating against employees based on sexual preference.”
And this is just the beginning! I am not particularly religious but I am sure there are many government regulations out that a business could claim is burdensome to their religious liberty. This is all a new era in corporate law so we will just have to see how it plays out. One thing is for certain, if you are a very religious entrepreneur, well Hobby Lobby ensures that your faith is now an asset in the business sphere.
