Wednesday, December 04, 2013

Hobby Lobby and the Establishment Clause, Part II: What Counts As A Burden on Employees?

Guest Blogger

Nelson Tebbe, Richard Schragger, and Micah Schwartzman

Last week, we argued here and elsewhere that a basic constitutional issue has been overlooked in the religious freedom challenge to the contraception mandate. In brief, the missing argument is that granting a statutory exemption to the mandate for religious employers would violate the Establishment Clause by imposing a significant burden on the employees who are the intended beneficiaries of the mandate. A longstanding nonestablishment principle prohibits the government from lifting its burden on the religious beliefs of one party when that would mean shifting the cost to third parties who do not share those beliefs. Now that the Supreme Court has agreed to hear Hobby Lobby and Conestoga Wood, it is imperative that this constitutional issue be aired.

In this post, we want to address one objection to that argument, namely that if religious employers are exempted from the mandate their employees will suffer no burden at all. According to this objection, employees have no right to health insurance that covers contraception in the first place. Therefore, when religious employers are relieved of the obligation to provide that coverage, employees suffer no burden whatsoever. They are simply put in the same position they were in before Obamacare: without coverage for contraception.

This objection presents a baseline question. If the normal state of affairs is that no one has contraception coverage, then denying that coverage imposes no burden (even if it is unfair). If, however, the baseline for comparison is a world in which everyone can legitimately expect affordable health insurance that includes contraception, then removing that coverage imposes a burden. Which is correct?

We think that simply posing the question comes close to answering it. Today, after Obamacare, these employees have a statutory entitlement to affordable health insurance coverage that includes contraception. Creating the general entitlement was the point of the Affordable Care Act, and the government has defined the guarantee of preventative care to include contraception. As Joey Fishkin explained, the ACA uses a multi-pronged strategy to guarantee health insurance coverage to all Americans. Private employers like Hobby Lobby are an integral part of that strategy, which alters legal entitlements for everyone.

In this world, which we now occupy, denying contraceptive coverage only to employees at religiously-owned businesses creates a gap. Almost everyone else can expect contraception coverage, including people employed at exempt religiously-affiliated nonprofits (because the law provides alternative coverage for them). People who do not get health insurance from an employer can obtain subsidized coverage on an exchange, and it will include contraception.

To see the baseline point more clearly, compare Social Security. Right now, as Joey Fishkin points out, employers are not required to provide retirement benefits – they can choose whether to set up 401(k) plans for their workers. But imagine that the federal government decided to administer part of Social Security directly through large private employers. Everyone working for such a company received retirement benefits through their employer instead of from the government directly. Imagine further that religious employers objected to the scheme and brought RFRA challenges. Many people will share the intuition that employees of those businesses have been burdened by the loss of Social Security benefits. And the situation here is analogous. Like the Social Security statute, the ACA has altered Americans’ legal claims to basic health insurance.

Now there are differences, admittedly – Social Security is relatively entrenched politically, while the ACA is new and controversial. To see why those differences aren’t fatal here, it is necessary to consider the deeper Establishment Clause principle at work.

At root, the constitutional conviction is that it is unfair and unconstitutional for the government to impose any substantial costs of a religious exemption on a focused and identifiable class of third parties. In this case, employees of Hobby Lobby should not be required to subsidize a religious accommodation for the company. That presents serious constitutional problems.

Costs would be shifted if Hobby Lobby prevails, because the religious employer would be relieved from a government-imposed obligation and its employees would be denied a benefit they would otherwise receive. (Gedicks and Van Tassell make a similar point.) And that is all we mean when we say – and all we need to show in order to argue – that employees risk being burdened in the relevant sense for Establishment Clause purposes. The ACA doesn’t need to have the staying power of Social Security for this to be true, and it doesn’t have to be considered an inalterable part of the welfare state.

Supreme Court case law supports our understanding of third-party burdens. In United States v. Lee, the Court rejected a challenge by Amish employers who objected to paying social security taxes on behalf of their employees. Specifically, the Court found that the government’s interest in providing the benefits scheme in a relatively uniform way was compelling. It also explained that

“When followers of a particular sect enter into commercial activity as a matter of choice, the limits they accept on their own conduct as a matter of conscience and faith are not to be superimposed on the statutory schemes which are binding on others in that activity. Granting an exemption from social security taxes to an employer operates to impose the employer's religious faith on the employees.”

In a footnote, the Court said it was not considering whether Congress would have violated the Establishment Clause if it had voluntarily exempted the Amish employers in Lee. Yet it finds the rule against “impos[ing] the employers religious faith on the employees” to be important. Tellingly, when Congress extended a religious exemption after Lee, it only covered religious employers for wages paid to workers who share their beliefs.

Our main point is simply that if failing to pay social security taxes in Lee raises a concern for third parties, then denying contraception coverage in Hobby Lobby counts as a burden, too. Nothing depends on the relative entrenchment of the two programs – the point is simply that employers cannot shift costs that they would otherwise bear, because of a religious objection, onto employees who otherwise would receive those benefits. Targeted accommodation of religious belief through statutes is constitutionally permissible in many situations, but not when it works to remove preexisting benefits to employees who do not share the same commitments of conscience.

Nelson Tebbe is Professor of Law at
Brooklyn Law School. You can reach him by e-mail at nelson.tebbe at  

Richard C. Schragger is Perre Bowen Professor Barron F. Black Research Professor of Law at the University of Virginia School of Law. You can reach him by e-mail at schragger at

Micah J. Schwartzman is
Edward F. Howrey Professor of Law at
the University of Virginia School of Law. You can reach him by e-mail at schwartzman at

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