The Supreme Court Rules in Favor of Corporations to Opt Out of Contraceptive Mandate in Burwell v. Hobby Lobby

by Cranfill Sumner & Hartzog LLP

On June 30, 2014, in a decision on two cases involving application of a mandate of the controversial Affordable Care Act, the U.S. Supreme Court ruled that closely held corporations are not required to pay for employees’ contraceptives if the owners of the companies have religious objections. In Burwell et al. v. Hobby Lobby et al. (No. 13-354) (June 30, 2014), and in Conestoga Wood Specialties Corporation et al. v. Burwell et al. (No. 13-356) (June 30, 2014), the Supreme Court held 5-4 that the contraceptive mandate of the Affordable Care Act, requiring companies to provide cost-free contraceptives to employees, violated the Religious Freedom Restoration Act.

The Hobby Lobby Decision

Under the Religious Freedom Restoration Act of 1993, the Government may not take any action that substantially burdens the exercise of religion unless that action constitutes the least restrictive means of serving a compelling government interest. The contraceptive mandate of the Patient Protection and Affordable Care Act of 2010 requires certain employers’ group health plans to furnish cost-free “preventive care and screenings” for women, including Food and Drug Administration approved contraceptive methods. At issue in Hobby Lobby and Conestoga are four contraceptive methods, which serve to inhibit further development of an already fertilized egg and operate as abortifacients.

The owners of three closely held corporations sued the Federal Government for violation of their religious beliefs under the Religious Freedom Restoration Act and the Free Exercise Clause of the First Amendment, citing their sincerely held beliefs that life begins at conception. The owners sought to enjoin application of the contraceptive mandate insofar as it requires them to provide health care coverage for these contraceptives. In No. 13-356, the Third Circuit denied the injunction, holding that a for-profit corporation such as Pennsylvania-based Conestoga Wood Specialties could not “engage in religious exercise” under the Religious Freedom Restoration Act or the First Amendment. In No. 13-354, the Tenth Circuit similarly denied an injunction, but held that businesses such as Oklahoma-based Hobby Lobby, Inc. and Mardel are “persons as contemplated by the definition in the Religious Freedom Restoration Act and that the corporations were substantially burdened in their exercise of religion by the mandate.

On Monday, in a majority opinion authored by Justice Alito, the Supreme Court reversed the Third Circuit’s ruling and affirmed the Tenth Circuit’s ruling, rejecting the Government’s arguments. Turning first to the Government’s contention that the Religious Freedom Restoration Act did not apply to corporations, the Supreme Court held that the Religious Freedom Restoration Act applied to govern the activities of the three closely held corporations and that the definition of “persons” in the Religious Restoration Freedom Act included corporations. The Government also failed to persuade the Court that the owners’ religious beliefs were too attenuated with an employee’s own choice of contraception to be substantially burdened by application of the contraceptive mandate. The Court noted that by requiring the owners to comply with the contraceptive mandate, the owners were forced to compromise their religious beliefs or face steep fines under the Affordable Care Act for refusing to provide the mandated health-care coverage. Finally, in assuming that the interest of guaranteeing cost-free access to the four challenged contraceptive methods is a compelling government interest, the Court likewise rejected the Government’s argument that the Affordable Care Act implements the least restrictive means of furthering that interest. In support of other least restrictive means of furthering that assumed interest, the Court referred to other provisions in the Affordable Care Act that applied to religious nonprofit organizations, exempting these organizations from the requirement to provide contraceptive coverage.

Justice Kennedy filed a concurring opinion, asserting that the majority did not properly resolve whether the Government should create additional programs to pay for the contraceptive methods that the corporate owners found objectionable. Justice Ginsberg authored a dissent in which Justice Sotomayor joined and Justices Breyer and Kagan joined as to all but one part. In her dissent, Justice Ginsberg noted that the Religious Freedom Restoration Act was misread by the majority and that the majority decision will open the door to a host of other implications. Justices Breyer and Kagan also filed a dissenting opinion, noting that a decision on the merits did not require a determination as to whether the Religious Freedom Restoration Act applied to for-profit corporations.

The Effect of Hobby Lobby

The high profile Hobby Lobby case has been closely monitored by advocates of corporate rights, religious rights, and women’s rights. The decision involves two aspects that appear to hold big implications in those contexts. First, the Supreme Court has held for the first time that a for-profit corporation can hold and exercise religious beliefs. Second, while the decision has received criticism by some women’s groups, the ruling also served to recognize a woman’s right to contraception as a compelling government interest, which has not been recognized before.

Nevertheless, as noted by Justice Alito, the holding is limited to the narrow set of circumstances involving closely held corporations and the contraceptive mandate. Although the decision turned on application of one, single requirement of the politically volatile Affordable Care Act, the Hobby Lobby ruling will likely have far more impact on religious liberty, employment, and corporation law.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Cranfill Sumner & Hartzog LLP | Attorney Advertising

Written by:

Cranfill Sumner & Hartzog LLP

Cranfill Sumner & Hartzog LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.