Hobby Lobby gained national attention when its leadership announced they would not bow to the Obama Administration’s violation of their religious liberty. Thousands of Americans pledged to shop at the retailer over the weekend to show their appreciation for this stand—a stand that could cost the company up to $1.3 million in fines per day.
Like many other companies, Hobby Lobby’s health insurance plan renewed on January 1, causing them to be subject to the Health and Human Services (HHS) mandate under Obamacare. This mandate forces employers to pay for coverage of abortion-inducing drugs like the “morning after” and “week after” pills, which directly violates many Americans’ deeply held beliefs—including Hobby Lobby’s owners, the Green family. The Greens, who founded the company, close all its locations on Sundays and seek to operate in accordance with Christian principles—including offering an employee health care plan that aligns with those values.
The Obama Administration’s outrageous position is that business owners’ rights to religious freedom end when they walk into their workplaces, claiming that “for-profit, secular employers generally do not engage in any exercise of religion protected by the First Amendment.”
If employers don’t change their health plans to comply, they will be hit with fines—up to $100 per employee per day. But if they stop providing health coverage, Obamacare’s double whammy means that, come 2014, employers with more than 50 employees could instead be hit with fines for that.
Thirteen for-profit companies have received rulings touching on the merits of their cases from the courts so far. Ten have secured relief—though temporary—from having the mandate enforced against them. Three companies have been denied relief: Hobby Lobby, Autocam Corp., and Grote Industries.
Hobby Lobby founder and CEO David Green said, “The conflict for me is that our family is being forced to choose between following the laws of the country that we love or maintaining the religious beliefs that have made our business successful and have supported our family and thousands of our employees and their families.”
>> Watch the Green family talk about their convictions and their work
Hobby Lobby has more than 13,000 employees, so the $100 per employee per day fine is crippling.
John Kennedy, CEO of Autocam in Grand Rapids, MI, says his employees “are like family” and that he “can’t in good conscience choose between violating my beliefs and meeting my associates’ needs. It just doesn’t seem right.”
>> Watch John Kennedy of Autocam explain why he is fighting the mandate
William Grote III, CEO of Grote Industries, which manufactures vehicle lighting and safety systems, has said, “It would easily destroy the company should we not do it.”
For family business owners like the Kortes, a Roman Catholic family seeking to manage their construction company, K & L Contractors, in a manner consistent with their faith, this means penalties of as much as $730,000 per year, an amount that would be financially ruinous for their company and for them personally.
But at least one federal appellate court has expressly rejected the position that the Kortes’ religious freedom rights depend solely on the fact that they operate a secular, for-profit business, and litigation over this key legal question, which affects other family business owners like the Greens of Hobby Lobby, is likely headed to the U.S. Supreme Court.
Late last year, a three-judge panel of the Seventh Circuit Court of Appeals ruled 2-1 to issue a preliminary injunction in favor of the Kortes, concluding that their Religious Freedom Restoration Act challenge to the HHS mandate is likely to succeed when their case is ultimately decided. It criticized the government’s position for “ignor[ing] that Cyril and Jane Korte are also plaintiffs” who “would have to violate their religious beliefs to operate their company in compliance with [the HHS mandate].” “That the Kortes operate their business in the corporate form is not dispositive of their claim,” the court held.
In other words, the fact that they operate a business doesn’t mean they give up their rights.
Pastor and author Rick Warren said in a statement about Hobby Lobby’s stance:
Every American who loves freedom should shudder at the precedent the government is trying to establish by denying Hobby Lobby the full protection of the First Amendment.
Freedom of religion doesn’t stop when an American walks outside his or her home or place of worship. For these business owners trying to live out their beliefs in the way they run their businesses, this mandate forces an excruciating decision.
Heritage research fellow Dominique Ludvigson contributed to this article.
Frequently Asked Questions on the HHS Mandate
HHS Mandate Information Central: The Becket Fund’s catalog of all the legal challenges