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Hobby Lobby wins Supreme Court Case Challenging ACA Mandate

The Supreme Court announced this morning that Hobby Lobby has won its case challenging the Affordable Care Act’s mandate that requires companies to provide free contraceptives as part of their healthcare plan. The case was decided by a 5-4 majority with a decision authored by conservative Justice Samuel Alito.

In the opinion, the court granted “closely held companies” the right to the same accommodations that the government gives nonprofit organizations with religious objections to contraceptives. The narrowly-written opinion specified that it only applied to the contraceptive mandate and should not be construed to allow the withholding of coverage for other medical services or to allow discrimination on religious grounds.

The court indicated that the government should take on the responsibility of providing the coverage for the contraceptives that are objected to so that there is no coverage gap for employees.

How did Hobby Lobby end up suing the government?

It’s not often that a crafts industry company not only makes national news, but makes national law. How did we get to this day?

Hobby Lobby is a family-owned chain of craft stores founded by the Green family in Oklahoma City, Oklahoma. The company’s first store was opened in 1972, and the chain now includes 569 stores employing approximately 13,000 people. The company is very interwoven with the religious beliefs of its owners, who have devoted a significant portion of their wealth to accumulating the world’s largest collection of biblical artifacts and creating a museum in Washington DC to display them. Hobby Lobby stores are not open on Sunday, citing the Greens’ religious philosophy as the reason.

Sebelius v. Hobby Lobby (now known as Burwell v. Hobby Lobby because of the new HHS secretary) was filed in September 2012 after a non-profit right wing law firm called the Becket Fund for Religious Liberty approached Hobby Lobby about challenging the ACA contraception mandate. Founder & CEO David Green told the Wall Street Journal in March that he was shocked after receiving that phone call to discover that the company’s healthcare plan was covering some of the emergency contraceptives that the Becket Fund wished to challenge the ACA coverage mandate for requiring. The Greens, the Becket Fund, and many conservatives believe that Plan B and IUD’s cause abortions because they can sometimes work by preventing the implantation of a fertilized egg.  (The American College of Obstetricians & Gynecologists disagrees with this characterization, defining pregnancy scientifically as only beginning after a fertilized egg is implanted in the uterus.) Green told the Journal that he “called for the insurer to revoke that coverage” and Hobby Lobby agreed to become party to the Becket Fund’s proposed lawsuit challenging the ACA mandate for coverage for those items.

The case was eventually argued before the U.S. Supreme Court on March 25th, 2014, after Hobby Lobby won several victories in lower courts that were appealed by Federal government lawyers defending the ACA. The Supreme Court agreed to hear the case because similar challenges to the ACA contraceptive mandate were denied in other jurisdictions. A Supreme Court decision is required to sort out the discrepancy, and Hobby Lobby (in conjunction with a case filed by Conestoga Wood Specialties Corp., also a Becket Fund case) was the first case to make it to the high court.

So what does this mean for Hobby Lobby?

In the short term, the decision means the company is no longer facing the threat of huge government fines. They are also no longer faced with having to make decisions about whether to terminate their health plan benefits for employees, which might possibly affect their ability to recruit and retain employees (although their well above market wages would likely have still made them an attractive employer).

But fines aren’t the only possible consequences for the company of this issue. There is a reason that most companies stay far, far away from political issues like the ACA mandate: controversy can be bad for business. By its very nature, wading into a controversy means that you are putting your company in a situation where it is impossible to make everyone happy. Thus it is inevitable you will alienate at least part of your possible customer base.

Polls from multiple sources this week revealed that over half of Americans – even two thirds of female voters in one poll -  oppose allowing companies to opt out of contraceptive coverage based on the owners’ beliefs. While some customers do support Hobby Lobby (and their Facebook page is evidence of this), the lawsuit challenging the ACA on religious freedom grounds has made the Greens’ religious activities controversial for the company. It has certainly polarized the company’s customer base and resulted in boycotts by those opposed to the company’s legal actions.

This is not the only recent issue where religion has been a public stumbling block for the company. The company was involved in a controversy in Fall 2013 after a customer complained that they were treated offensively when inquiring about the availability of Hannukah merchandise, which the stores didn’t carry. Hobby Lobby eventually apologized and began carrying Hannukah products in certain markets.

There is a flip side to controversy’s effects, though. While the company will lose some customers who disagree with its stance on the ACA mandate, it will certainly also earn the loyalty of some customers who will make Hobby Lobby their preferred store because of their new awareness of the company’s values brought about by the publicity surrounding the Supreme Court case. Whether the inflow of customers will be greater than the outflow is the question.

Despite the controversies, for now, the company has continued to expand and appear to prosper. David Green told the Wall Street Journal in his March Wall Street Journal interview that the company reached $3.3 billion in sales last year. (Being a private company, Hobby Lobby is not required to file SEC reports.) New Hobby Lobby stores have also continued to open in 2014 as the chain executes its growth plans. Stores opened in Petoskey, Mi and Hiram, GA on June 23rd, and three more stores are slated to have their grand openings on July 7th in New Jersey.

28 Responses to Hobby Lobby wins Supreme Court Case Challenging ACA Mandate

  1. Carol June 30, 2014 at 12:00 pm #

    Nancy, Thank you for your well written journal piece on the Hobby Lobby decision this morning.
    Hobby Lobby is well respected around the country for many reasons. C.

  2. Tracey June 30, 2014 at 12:08 pm #

    Thank you for covering this issue, Nancy! I have been surprised how silent most craft-bloggers have been about this issue, though I suppose I understand that many do not want to take sides or be seen as political. I, for one, am outraged that a craft retailer has worked so hard to chip away at women’s rights to contraceptive care, and I wouldn’t dare spend a cent at Hobby Lobby ever again. I also think twice about purchasing products from companies who deal with Hobby Lobby, especially those who create exclusive products for their stores or do special promotions with them. HL’s decision that it, as a corporation, should have that kind of say in the personal health decisions of its 13,000 employees is unconscionable.

    • biscuitsandbooks June 30, 2014 at 12:54 pm #

      I’m with you, Tracey. We have never had a Hobby Lobby in our area, but one is slated to open in Burbank, California in July. You can bet that I will not step foot in their store. Supporting a company that so obviously de-values women is not where I plan to spend my hard-earned money.

  3. Tracy June 30, 2014 at 12:42 pm #

    Well said, Tracey.

  4. Tracy June 30, 2014 at 1:43 pm #

    I agree Tracey. I will not spend another dollar in Hobby Lobby. No loss. There are many other places to shop for craft supplies. But unfortunately this is a huge loss for women. :-(

  5. MK June 30, 2014 at 2:13 pm #

    So glad that I have my freedom not to spend another dime at Hobby Lobby. Mr. Green, I too have a say as to where I want to spend my dollars. A woman has a choice and this has a choice not to work for you and shop with you.

  6. Sue June 30, 2014 at 2:36 pm #

    I applaud Hobby Lobby for standing up for their values. Just because those values are different from some women’s doesn’t mean that they are devaluing women. Not all women think the same on this issue, yet we are all fortunate that it is a free country and all of us have the right to decide whether to work or shop there. I dare say it won’t impact their business as much as some would like to think.

  7. daw39Debra williams June 30, 2014 at 2:52 pm #

    I won’t be shopping at HL and it is our only big box craft store. I will be shopping at LSS or online. My issue is that this only affects their women employees and not the men. Just feels wrong to me. When I look at the store here most of the employees are young women and the manager is a man and one other man is all I have seen. Just feels wrong to me.. Their choice, my choice.

  8. itsybel June 30, 2014 at 3:23 pm #

    What no one talks about is the employee has the right to seek other employment. It seems that business owners no longer have rights to run their own business the way the business owner wants to run it. Employees forget who is actually signing their paychecks, and they have a right to work elsewhere if they don’t like a way a business owner runs their business. I’m glad HL stood up for their values and their business–more business owners need to take back ownership of their business.

    • Tracey June 30, 2014 at 5:19 pm #

      I’m not okay with the “work somewhere else” argument. A single corporation should not have the right to enforce its religious beliefs on 13,000 employees. Those are very bad odds for workers who now have the burden of having to seek out employers who will respect their rights. This is why we have protections in place (like Title VII of the Civil Rights Act, for instance) to protect workers from unfair treatment from employers. Plenty of women were told to just work elsewhere when they encountered sexual harassment in the workplace.

      • Terri Torrez June 30, 2014 at 6:11 pm #

        I totally agree, Tracey. What frustrates me most is that the medication in question has medical uses other than contraception. This has nothing to do with freedom of religious expression; it’s about access to necessary healthcare.

  9. janscholl June 30, 2014 at 6:11 pm #

    It was never about values relating to religion. It was about VALUE of the dollars. My entire family and our crafting friends stopped shopping HL when this whole issue came up. So maybe about 33-35 people no longer spend thousands of dollars there. I always had issues with the slave labor mentality of items purchased from the Far East and that region, so I just ignored them and only bought normal craft items. Then my girls got married. My figuring just on silk flowers, vases and ribbon alone was $9.000.oo for two historic venues. We purchased elsewhere and donated the remaining leftovers to schools and churches. Yeah, we the athiests, donated to churches. This is about control. Women are chattel. Not only did they work there but they purchased there…Women kept this store in business. Go look at parking lots now in Michigan. NOt so nice is it?

  10. Donna Q June 30, 2014 at 6:44 pm #

    Nancy, thanks for the update and all the information included in your article.

  11. PjP June 30, 2014 at 7:09 pm #

    Another good day to be glad I’m Canadian. Although I’ve traveled and shopped for scrap stuff in the states I’m proud to say that I’ve NEVER set foot in a Hobby Lobby and I never shall. Shame on the Supreme Court.

  12. Debby June 30, 2014 at 7:25 pm #

    Thank you Nancy for the detailed report.

  13. Bren June 30, 2014 at 7:50 pm #

    I have said this elsewhere – I suppose we should all be grateful that we don’t work for a company held by Christian Scientists because that would mean they would offer us no coverage, correct? At least as far as this interpretation by the SCOTUS…… Scary…….

  14. Tamatha June 30, 2014 at 11:03 pm #

    i think Ginsburg hit the nail on the head. this is going to open up a can worms. what happens when a Muslim company insists you must wear a habib on your hair because its sanitary and that’s their company uniform?

  15. Pat July 1, 2014 at 12:16 am #

    I haven’t shopped at Hobby Lobby since this controversy started and I never will again and believe me they were getting a lot of money from me! I just can’t do it in good conscience. Thank you for the excellent coverage. I wonder how good their maternity leave policies are?

  16. gabmcann July 1, 2014 at 6:38 am #

    Thanks for explaining it in simple, easy to understand language Nancy

  17. Cindy deRosier July 1, 2014 at 8:58 am #

    Thank you for such a well-written, complete, unbiased article. This must have been very difficult to write, but you’ve done it perfectly.

    • Nancy Nally July 1, 2014 at 9:54 am #

      Thanks a lot Cindy! :)

  18. Phyllis Strickland July 1, 2014 at 10:33 am #

    Thanks for a well written piece! Shame on the Supreme Court and Hobby Lobby for their infringement of Women’s Rights. Slowly they are being chipped away by right wing extremists and we are becoming a backwards nation again. It always amazes me that such minority groups have so much power, what a travesty. I for one will never shop at Hobby Lobby again!

  19. Susanne July 1, 2014 at 10:55 am #

    I think if those who are truly interested in the issue will look into it further and get the details of the ruling, even feminists might see that it was a reasonable compromise of two parties sets of rights being balanced. In a civilized society the rights of all parties have to be considered and weighed. I know it is difficult to see that when you feel as the balance tipped out of your favor.

  20. phaerygurl July 1, 2014 at 1:15 pm #

    As soon as I heard about this HL story, I decided to stop shopping there. Supposedly the decision is very limited, however, I don’t like employers having the ability to force their religious beliefs on their employees. However, in this economy (which I hate to say that way, but it’s true), these employees can’t just find another job. Especially in retail, it’s difficult to get a decent-paying job. And my concern is that this decision will be touted by other employers as a reason to now allow something that is against their beliefs. A friend of mine worked for a doctor who was Muslim. Did the doctor prohibit his employees from eating pork, or force them to pray with him? No, he upheld his beliefs while still practicing medicine and everyone else did their job.

    I think what really gets me is that it affects employment in general (now we have to research the religious beliefs before we apply for a job?), and it takes the choice away from the people it’s affecting. It is a choice to use or not use birth control. By letting a company opt-out, you’re taking the choice away from those people. And I don’t want my boss (who yes, signs my paycheck, but for doing MY JOB, not for upholding HIS/HER RELIGIOUS BELIEFS, for the most part), to tell me s/he is going to make the PERSONAL choice and decision regarding MY body, regardless of how I feel.

    I understand that those are the owner’s beliefs, but so many people have deeply held beliefs. Different beliefs, and we should not be subjected to someone else’s beliefs, because they are personal. And I had no idea that the HL owners were Christians until now. I knew Chick Fil-A was, but not HL.

    • Bonnie July 1, 2014 at 2:57 pm #

      Among my concerns about this decision is that it does open the door for other corrporations to attempt to impose their personal beliefs on their employees, who may not share them. I’m extremely disappointed in the decision.

      • phaerygurl July 3, 2014 at 8:39 am #

        Exactly what my husband said. It sets a precedent that other companies can pull out and it hurts the employees. Unless you’re working for a religion-based company/organization, you should not have to worry about having another’s religious beliefs forced upon you. That takes away freedom of religion. And doesn’t this also affect the equal employment regulations, meaning no discrimination? Upsetting and scary.

  21. Sheila Oxley July 2, 2014 at 2:30 am #

    I heard that they do cover contraception (16 in fact) just not the four that terminate a fetus. I’ve had insurances that wouldn’t even cover a diaphragm, if I wanted it I would have to pay for it myself. They are not saying their employees must accept their religious beliefs to work their or they would be fired for using contraception, so were is the real harm? I see the government trying to control too much as a bigger problem.
    I also heard they pay their employees above the minimum wage. Personally I would rather hear from some of the employees about their feelings before I judge a company.

  22. Melissa July 3, 2014 at 1:01 am #

    Happy to see so many crafters here sticking up for women’s rights and vowing not to shop at HL- me too!