Malcolm Rivera
The Burwell v. Hobby Lobby case of 2014 is a landmark decision in US corporate law, with the US Supreme Court ruling that privately held for-profit corporations could be exempt from regulations that owners religiously object to. This was based on the Religious Freedom Restoration Act of 1993, which states that the government should not substantially burden a person's exercise of religion. This case has sparked debates about the constitutional implications for businesses, including the extension of religious freedom rights to corporations, the impact on women's access to contraceptive services, and the role of corporate personhood. The decision has been criticised for potentially limiting employees' healthcare and violating their religious rights, while others argue it protects religious freedom. The Hobby Lobby case exemplifies the complex intersection of corporate law and constitutional rights, with ongoing discussions about the appropriate balance between religious liberty and other fundamental rights.
| Characteristics | Values |
|---|---|
| Decision | Burwell v. Hobby Lobby Stores, Inc. |
| Year | 2014 |
| Court | United States Supreme Court |
| Decision | Allowed privately held for-profit corporations to be exempt from a regulation that its owners religiously object to |
| Decision | The contraceptive mandate of the ACA violated RFRA |
| Decision | The government had to offer exemptions to religious for-profit corporations that claimed the contraceptive mandate burdened their religious beliefs |
| Religious Freedom Restoration Act (RFRA) | Does not protect the right to religion of for-profit corporations |
| Religious Freedom Restoration Act (RFRA) | Protects the religious liberty of the humans who own and control those companies |
| Contraceptive Mandate | Required employer-provided health insurance plans to offer their beneficiaries certain contraceptive methods free of charge |
| Contraceptive Mandate | Prevented women from receiving contraceptive care and jeopardized their overall health and well-being |
| Contraceptive Mandate | Was not the least restrictive means of attaining the government's objective |
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What You'll Learn
The Religious Freedom Restoration Act (RFRA)
While the RFRA initially applied to both state and federal laws, the Supreme Court ruled in 1997 that its application to state governments was unconstitutional, as it was not a proper exercise of Congress's enforcement power. Despite this, the RFRA continues to be applied to the federal government and has been used to protect the religious freedom of individuals and corporations in several notable cases.
One such case is Burwell v. Hobby Lobby, in which the Supreme Court held that Hobby Lobby, a for-profit corporation, could not be compelled to pay for health insurance covering abortion-inducing contraceptive drugs if it violated the sincere religious beliefs of the owners. This decision was criticised by some as an assault on women's rights to contraceptive services and an improper extension of religious freedom rights to corporations. However, others argued that it was a reasonable application of established legal principles.
Another example is Navajo Nation v. United States Forest Service, where the Court of Appeals for the Ninth Circuit held that the use of recycled sewage water to manufacture artificial snow was not a "substantial burden" on the religious freedom of Native Americans. The RFRA has also been used to protect the rights of Muslim and Jewish individuals and has been a cornerstone for tribes challenging the government's plans that would impact sacred sites and tribal members' health.
The RFRA has been interpreted to allow those whose religious rights are adversely affected by federal officers or agencies to seek remedies, including monetary damages. This was demonstrated in the case of Tanzin v. Tanvir, which involved three Muslim men placed on the No Fly List for refusing to be informants. The RFRA governs the actions of federal officers and agencies and can be applied to the internal operations of the federal government.
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Corporate personhood
The concept of corporate personhood has a long history, dating back to medieval times. It refers to the ongoing legal debate over whether rights traditionally associated with natural persons should also be afforded to juridical persons, including corporations. In the Middle Ages, juridical persons were chartered as corporations to facilitate collective perpetual ownership of assets and to avoid fragmentation resulting from personal property inheritance laws. The word "corporation" comes from the Latin "corpus", meaning "body", reflecting the idea of a collective entity.
Over time, incorporation became an essential mode of economic development, offering advantages such as continuing existence beyond the lifespan of its members, the ability to act without unanimity, and limited liability. By the Renaissance, European jurists recognised that churches and universities chartered by the government could gain property, enter into contracts, sue and be sued independently. This concept of juridical personality allowed corporations to conduct business while shielding individual shareholders from personal liability.
In the United States, the debate over corporate personhood has centred on the Fourteenth Amendment and its application to corporations. The Supreme Court has increasingly granted more rights to corporations, including those traditionally viewed as solely for individuals, such as the right to free speech and religious exercise. The Citizens United v. FEC case in 2010 upheld the rights of corporations to make unlimited political expenditures under the First Amendment, sparking criticism and calls for a Constitutional amendment to abolish corporate personhood.
The Hobby Lobby case exemplifies the constitutional implications of corporate personhood. The Supreme Court held that Hobby Lobby, a closely held, for-profit corporation, could not be compelled to provide health insurance covering abortion-inducing contraceptives if it violated the sincere religious beliefs of its owners. This decision was based on the Religious Freedom Restoration Act (RFRA) and the understanding that corporations can raise religious freedom claims. Critics argued that corporations exist solely to make money and should not have religious rights, while supporters pointed out that corporations have always been able to pursue lawful purposes beyond solely profit-making. The Hobby Lobby case highlights the ongoing debate surrounding corporate personhood and the extension of constitutional rights to corporations.
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The Affordable Care Act (ACA)
However, in the Burwell v. Hobby Lobby case, the US Supreme Court ruled that Hobby Lobby and other "closely held" stock corporations could deny their employees access to birth control coverage based on the Religious Freedom Restoration Act (RFRA) of 1993. The RFRA provides that the government should not substantially burden a person's exercise of religion, even if the burden results from a rule of general applicability. Hobby Lobby's owners argued that providing access to contraceptives violated their religious beliefs, and the Supreme Court allowed them to exempt themselves from the ACA's mandate on religious grounds.
The ACA's intersection with the RFRA and the First Amendment has been a subject of debate, with critics arguing that corporations have only one purpose: to make money. However, under standard corporate law, corporations are entitled to pursue any lawful purpose, including social or religious purposes. The ACA's mandate for contraceptive coverage has faced legal challenges from corporations claiming religious objections, with Hobby Lobby being a notable example.
The ACA, as implemented by the Obama administration, aimed to balance access to healthcare, including contraceptives, with religious freedom considerations. However, the Hobby Lobby case set a precedent where the Supreme Court allowed businesses to deny employees access to specific healthcare services based on religious beliefs. This ruling has been criticised for potentially opening the door to further denial of healthcare and infringement on employees' rights.
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The separation of church and state
The case of Burwell v. Hobby Lobby Stores, Inc. in 2014 brought to light several constitutional implications for businesses. The ruling allowed privately held for-profit corporations to be exempt from regulations that owners religiously object to, provided a less restrictive means of furthering the law's interest. This was based on the Religious Freedom Restoration Act (RFRA) of 1993.
The case centred around the contraceptive mandate, a regulation requiring employers to cover certain contraceptives for their female employees. Hobby Lobby, a family-owned for-profit corporation, objected to this on religious grounds, arguing that life begins at fertilisation and, therefore, certain contraceptives induced abortions. The Supreme Court's decision to protect the religious freedom of the owners of Hobby Lobby was criticised by many as an assault on women's rights to contraceptive services and an improper extension of religious freedom rights to corporations.
The concept of corporate "personhood" is a familiar idea in law, allowing corporate entities to exercise certain legal rights in their own name. This includes the right to religious exercise, which has been contested by critics who argue that corporations have only one purpose: to make money. However, under standard corporate law, corporations are entitled to pursue any lawful purpose, and it is not unusual for them to have social or religious purposes.
The case of Hobby Lobby highlights the complex relationship between church and state in the United States. The First Amendment of the Constitution guarantees the free exercise of religion and prohibits the government from establishing an official religion. The Religious Freedom Restoration Act, which was central to the Hobby Lobby case, further protects the religious liberty of all Americans, ensuring that the government cannot substantially burden a person's exercise of religion.
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The rights of shareholders
Shareholders are entities that own one or more shares in a company's stock or mutual fund. They are also often referred to as stockholders. Shareholders are the owners of the company and have rights and responsibilities. They benefit from increased stock valuations or profits distributed as dividends when the company is successful. They can also lose money when the company loses money and share prices drop.
Shareholders have the right to participate in corporate elections and vote on critical matters, such as the approval of members of the board of directors, dividend distributions, mergers, and other issues that affect the company. They have the right to inspect the company's books and records, and the power to sue the company for the misdeeds of its directors and/or officers. Shareholders can also claim a proportionate allocation of proceeds if a company liquidates its assets.
Shareholders do not control the day-to-day running of the company; that is the role of the company directors. However, they have the right to receive a copy of the company's annual report and accounts, as well as any written resolution proposed by the directors or shareholders. They also have the right to attend annual meetings, either in person or via conference calls, and to appoint a proxy to attend and vote on their behalf if they are unable to attend.
In the case of Hobby Lobby, the corporation is managed by its five shareholders "in a manner consistent with Biblical principles" that they unanimously share. This has led to the characterisation of Hobby Lobby as a "chartered partnership" or "incorporated partnership". The religious beliefs of the shareholders played a significant role in the Supreme Court's decision in Burwell v. Hobby Lobby, where the Court held that Hobby Lobby could not be compelled to pay for health insurance covering abortion-inducing contraceptive drugs, as it would violate the sincere religious beliefs of the owners. This decision attracted criticism from those who saw it as an assault on women's rights to contraceptive services and an improper extension of religious freedom rights to corporations.
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Frequently asked questions
The Hobby Lobby case was about whether for-profit corporations could be exempt from a regulation that its owners religiously object to. The case was a landmark decision in US corporate law.
The US Supreme Court ruled that the contraceptive mandate under the Patient Protection and Affordable Care Act violated privately held, for-profit corporations' right to religious freedom.
The Hobby Lobby case set a precedent for privately held corporations to be exempt from regulations that conflict with their owners' religious beliefs. This could potentially impact other areas of law and policy, such as anti-discrimination laws and labour regulations.
