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LEGAL ISSUES

Hobby Lobby Ruling Polarizes the Business Community

Vacillating between vindication and outrage, business owners are far from unified over the Supreme Court's Hobby Lobby decision.
Billionaire entrepreneur David Green, owner and founder of Hobby Lobby, prevailed at the Supreme Court.

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As the dust settles from the Supreme Court decision on Hobby Lobby, one of the most controversial Supreme Court rulings in years, business owners across the country took stock.

Some reacted with anger and are discomfited by the heightened prominence of religion in the workplace. Others see the decision as justification of strongly-held beliefs that they should be able to operate their businesses without government interference.

The Supreme Court cases, known as Burwell v. Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. v. Burwell, grew out of sections of the Affordable Care Act, which require new health plans to pay for contraception and fertility treatments. (The cases were renamed after Sylvia Burwell replaced Kathleen Sebelius as Secretary of Health and Human Services.)

In a 5-to-4 ruling, which split along ideological lines, Justice Samuel Alito writing the majority opinion, said closely held companies have a right to special religious exceptions when it comes to the benefits they're required to offer their employees under the Affordable Care Act. 

Closely held companies are, by definition, led by one to five people, who own 50 percent or more of a company's stock--and may include publicly traded companies. Per the decision, these companies may now exclude contraception and other fertility treatments from their coverage. Though, the federal government has the right to intercede--setting up a process whereby coverage could be obtained at an additional cost to individuals or the government.

"I am grateful for the ruling," says Michael Potter, chief executive of Eden Foods. "I believe the Supreme Court affirmed the rights afforded citizens of the U.S. in the Constitution, and it was the right thing to do." 

Eden Foods, of Ann Arbor, Michigan, which has 150 employees and $60 million in annual sales, was one of 100 businesses and nonprofits that sued the federal government for an exemption from the ACA's provisions covering birth control and fertility drugs, among other medications. 

While Potter's lawsuit quite clearly states the company was suing to be relieved from the obligation to provide contraception and fertility treatments to employees, Potter says the real issue was with the federal government's interference in health care.

"I object to the ACA in general, and my biggest objection is with the government over-reach," Potter says, adding that he instructed his employees, who are covered by Michigan Blue Cross-Blue Shield, to contact the provider to see if they can opt out of prescription drug coverage on their own.

"I thought this might be a good solution that would satisfy everyone," Potter says. 

On the other hand, the ruling touches a deep chord for more secular business owners, particularly women business owners, such as Makini Howell, owner and founder of Plum Restaurants in Seattle. The vegan restaurants collectively employ 52 workers, and Howell offers them health care coverage. 

"I don't think that religious groups have a right to tell you what you can and can't do with your body," Howell says. "You have a right to be covered under the ACA, and any plan should" include full coverage.

She adds that "women need to have access to health care that protects them in particular; we are different." 

The ruling also rankles some LGBT business owners, such as Ben Bethel, owner and general manager of the Clarendon Hotel & Spa, in Phoenix.

This spring, Arizona business owners turned back a state bill, nick-named "Pray Away the Gay,"  that would have given businesses wide latitude, based on religious objections, to discriminate against customers and employees based on their sexual orienation or expression. 

Legal observers have said that Monday's decision opens the door to similar discrimination in businesses against employees based on religious objections to things like homosexuality, or women who raise children out of wedlock.

"As a small business owner who cares about the health and well-being of my employees, as I do for my own family members, I do not want to restrict access to any health care for them," Bethel says. He adds that he's deeply concerned that religious exemptions could be used to curtail treatment such as for HIV, or horomone therapy, in addition to reproductive health treatment.

"We should not be giving employers freedom to control their employees' lives," Bethel says.

IMAGE: Getty Images
Last updated: Jul 1, 2014

JEREMY QUITTNER | Staff Writer | Staff Writer, Inc. and Inc.com

Jeremy Quittner is a staff writer for Inc. magazine and Inc.com. He previously covered technology for American Banker and entrepreneurship for BusinessWeek.




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