'Hobby Lobby' Leaves Employers in Limbo, Say Critics

'Hobby Lobby' Leaves Employers in Limbo, Say Critics Diego M. Radzinschi Demonstrators outside the U.S. Supreme Court, on the day the Court issued its decision in the Burwell v. Hobby Lobby case. Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL.

The U.S. Supreme Court’s Hobby Lobby decision [PDF] this week leaves the law in limbo when it comes to what employers can do in the name of religion. And that means only one thing: More litigation for companies.

The case involved two privately held companies that wanted to opt out of the Affordable Care Act’s mandate to pay for female contraceptives. Justice Ruth Bader Ginsburg’s dissent suggests that some companies might try to use the ruling to circumvent antidiscrimination laws, especially those dealing with areas that sometimes touch on religious beliefs such as gender and sexual orientation.

“It’s quite complicated, but one thing struck me: the law is now uncertain in this area,” employment attorney Lorene Schaefer, founder of Schaefer & Associates, told CorpCounsel.com. “Uncertainty in the business world breeds litigation, and the accompanying increased cost to doing business.”

Schaefer elaborated on this uncertainty in her employment blog. “Justice Ginsburg got it right when she noted in her dissent that the Supreme Court has in this 5-4 decision ‘ventured into a minefield,’” Schaefer wrote. Indeed, Ginsburg wrote that the decision was one of “startling breadth.”

Schaefer said that the ruling means courts now will be forced to evaluate the relative merits of an employer’s differing religious claims or the sincerity with which an asserted religious belief is held.

Another employment lawyer/blogger appears to agree with Schaefer’s take. John Hyman, a partner at Kohrman Jackson & Krantz in Cleveland and author of the Ohio Employer’s Law Blog, also agreed with Ginsburg on the ruling’s breadth. “We need to worry about how companies will try to use this opinion to opt out of laws they do not like,” he wrote.

Hyman continued, “I am concerned that this opinion could lead to a slippery slope of companies using religion to pick and choose laws based on their socio-political beliefs, which could undermine our civil rights laws, and is antithetical to the First Amendment religious freedoms upon which out country was founded.”

Paul Horwitz, a University of Alabama School of Law professor, asked in an op-ed article in The New York Times whether the ruling means a small-business owner will be sued, for instance, for declining to provide services to a same-sex couple due to the owner’s religious beliefs.

Horwitz suggests that the answer to that and other cultural conflicts now will play out in the marketplace and the courts. His bottom line: “Expect more Hobby Lobbies.”

And Steven Friedman, a health-care attorney at Littler Mendelson in New York, told CorpCounsel.com that it will be interesting to see if the ruling “opens the floodgates” to other types of exceptions in other areas of law as some suggest.

While no one knows if the ruling is broad enough to reach publicly held companies, Friedman noted that it could have a great deal of impact on general counsel at privately held companies like those involved in the decision, where the owners have strong religious beliefs.

He said that especially holds true for other mandates in the Affordable Care Act. “Where there are private employers that feel strongly about certain provisions of the act on account of the religious orientation of the owners of the company, there we may see a great deal of litigation,” he predicted.

“If I were a general counsel in a privately held company,” Friedman said, “I would be obliged to advise the ownership of what the majority held and to determine if there’s anything that those individuals want to do in light of the decision.”

And what about other areas of law, as well as publicly held companies? Friedman, like everyone else, is waiting and watching.

“It seemed the court is arguing amongst itself as to the breadth of this decision, with the majority stating that it is narrower than the dissent [states],” he said. “It will be interesting to see.”

And don’t forget: Costly, too.

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