Supreme Court Hobby Lobby opinion might only directly impact two companies

After the Dallas Business Journal published an article about the U.S. Supreme Court’s recent Hobby Lobby decision, a number of people asked me about potential impact on various business. Here are my thoughts:

Despite all the attention the case has gotten, the opinion might only directly impact two U.S. companies. The Affordable Care Act (also known as “the ACA” or “Obamacare”) itself only applies to companies with more than 50 employees. And the Supreme Court opinion only provides an exception to the ACA for closely-held companies.

There are, at most, a few dozen closely-held companies in the country which employ more than 50 people. That universe is further narrowed by the fact that the opinion only applies to companies with owners having sincerely-held religious beliefs opposing contraception. Of the few dozen closely-held that employ more than 50 people, only Hobby Lobby and Conestoga Wood Specialties (a Mennonite-owned cabinet company which was addressed in the Supreme Court opinion) have indicated that their ownership espouses sincerely held religious beliefs opposing contraception.

If another one of these few dozen companies were to suddenly claim sincerely-held religious beliefs opposing contraception, such a company would likely face a difficult and expensive legal battle to join Hobby Lobby and Conestoga in being exempt from the ACA’s contraception mandate. Specifically, in challenging Hobby Lobby and Conestoga’s claims to an exemption, the federal government did not question that the ownership of these companies had the requisite sincerely-held religious beliefs opposing contraception, as it was abundantly clear that they did. The ownership of both of these companies have long histories of being vocal about their religious beliefs opposing contraception.

On the other hand, if a company whose ownership had historically been silent about this issue were to now begin professing a sincerely-held religious belief opposing contraception, the federal government would almost certainly contest the sincerity of the company’s claimed religious belief. That would require a company to spend large sums of money on legal fees, likely outweighing any hoped-for savings on the cost of contraceptives (or insurance premiums for the contraceptives). Additionally, if the federal government were to contest the sincerity of a company’s claimed religious belief, the company’s individual owners would all be subject to giving lengthy depositions about their religious beliefs, any acts in their personal lives that might have been inconsistent with those religious beliefs (such as whether they had ever used contraceptives with any sexual partner), and their personal investments in companies that may not share those religious beliefs.

Of the few dozen closely-held companies with more than 50 employees, I would not be surprised if Hobby Lobby and Conestoga were the only companies directly impacted by the Supreme Court’s opinion.

 

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