SECRETARY OF HEALTH AND HUMAN SERVICES
HOBBY LOBBY STORES, INC., et al.
on writ of certiorari to the united states courtof appeals for the tenth circuit
[June 30, 2014]
Justice Alito delivered the opinion of the Court.
We must decide in these cases whether the Religious Freedom Restoration Act of 1993 (RFRA) permits the United States Department of Health and Human Services (HHS) to demand that three closely held corporations provide health-insurance coverage for methods of contraception that violate the sincerely held religious beliefs of the companies’ owners. We hold that the regulations that impose this obligation violate RFRA, which prohibits the Federal Government from taking any action that substantially burdens the exercise of religion unless that action constitutes the least restrictive means of serving a compelling government interest.
In holding that the HHS mandate is unlawful, we reject HHS’s argument that the owners of the companies forfeited all RFRA protection when they decided to organize their businesses as corporations rather than sole proprietorships or general partnerships. The plain terms of RFRA make it perfectly clear that Congress did not discriminate in this way against men and women who wish to run their businesses as for-profit corporations in the manner required by their religious beliefs.
Since RFRA applies in these cases, we must decide whether the challenged HHS regulations substantially burden the exercise of religion, and we hold that they do. The owners of the businesses have religious objections to abortion, and according to their religious beliefs the four contraceptive methods at issue are abortifacients. If the owners comply with the HHS mandate, they believe they will be facilitating abortions, and if they do not comply, they will pay a very heavy price—as much as $1.3 million per day, or about $475 million per year, in the case of one of the companies. If these consequences do not amount to a substantial burden, it is hard to see what would.
Under RFRA, a Government action that imposes a substantial burden on religious exercise must serve a compelling government interest, and we assume that the HHS regulations satisfy this requirement. But in order for the HHS mandate to be sustained, it must also constitute the least restrictive means of serving that interest, and the mandate plainly fails that test. There are other ways in which Congress or HHS could equally ensure that every woman has cost-free access to the particular contraceptives at issue here and, indeed, to all FDA-approved contraceptives.
In fact, HHS has already devised and implemented a system that seeks to respect the religious liberty of religious nonprofit corporations while ensuring that the employees of these entities have precisely the same access to all FDA-approved contraceptives as employees of companies whose owners have no religious objections to providing such coverage. The employees of these religious nonprofit corporations still have access to insurance coverage without cost sharing for all FDA-approved contraceptives; and according to HHS, this system imposes no net economic burden on the insurance companies that are required to provide or secure the coverage.
Although HHS has made this system available to religious nonprofits that have religious objections to the contraceptive mandate, HHS has provided no reason why the same system cannot be made available when the owners of for-profit corporations have similar religious objections. We therefore conclude that this system constitutes an alternative that achieves all of the Government’s aims while providing greater respect for religious liberty. And under RFRA, that conclusion means that enforcement of the HHS contraceptive mandate against the objecting parties in these cases is unlawful.
As this description of our reasoning shows, our holding is very specific. We do not hold, as the principal dissent alleges, that for-profit corporations and other commercial enterprises can “opt out of any law (saving only tax laws) they judge incompatible with their sincerely held religious beliefs.” Nor do we hold, as the dissent implies, that such corporations have free rein to take steps that impose “disadvantages . . . on others” or that require “the general public [to] pick up the tab.” And we certainly do not hold or suggest that “RFRA demands accommodation of a for-profit corporation’s religious beliefs no matter the impact that accommodation may have on . . . thousands of women employed by Hobby Lobby.” The effect of the HHS-created accommodation on the women employed by Hobby Lobby and the other companies involved in these cases would be precisely zero. Under that accommodation, these women would still be entitled to all FDA-approved contraceptives without cost sharing.
Congress enacted RFRA in 1993 in
order to provide very broad protection for religious
liberty. RFRA’s enactment came three years
after this Court’s decision in Employment Div.,
Dept. of Human Resources of Ore. v. Smith,
494 U. S. 872 (1990)
, which largely repudiated the method of analyzing
free-exercise claims that had been used in cases like Sherbert
v. Verner, 374 U. S. 398
(1963), and Wisconsin v. Yoder,
406 U. S. 205 (1972)
. In determining whether challenged government actions
violated the Free Exercise Clause of the First Amendment, those decisions
used a balancing test that took into account whether the
challenged action imposed a substantial burden on the
practice of religion, and if it did, whether it was
needed to serve a compelling government interest.
Applying this test, the Court held in Sherbert
that an employee who was fired for refusing to work on
her Sabbath could not be denied unemployment benefits.
And in Yoder, the Court held that Amish
children could not be required to comply with a state
law demanding that they remain in school until the age
of 16 even though their religion required them to focus
on uniquely Amish values and beliefs during their
formative adolescent years.
In Smith, however, the
Court rejected “the balancing test set forth in Sherbert.”
Smith concerned two members of the Native
American Church who were fired for ingesting peyote for
sacramental purposes. When they sought unemployment
benefits, the State of Oregon rejected their claims on
the ground that consumption of peyote was a crime, but
the Oregon Supreme Court, applying the Sherbert
test, held that the denial of benefits violated the Free
This Court then reversed, observing that use of the Sherbert test whenever a person objected on religious grounds to the enforcement of a generally applicable law “would open the prospect of constitutionally required religious exemptions from civic obligations of almost every conceivable kind.” The Court therefore held that, under the First Amendment, “neutral, generally applicable laws may be applied to religious practices even when not supported by a compelling governmental interest.”
Congress responded to Smith by enacting RFRA. “[L]aws [that are] ‘neutral’ toward religion,” Congress found, “may burden religious exercise as surely as laws intended to interfere with religious exercise.” In order to ensure broad protection for religious liberty, RFRA provides that “Government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability.” If the Government substantially burdens a person’s exercise of religion, under the Act that person is entitled to an exemption from the rule unless the Government “demonstrates that application of the burden to the person—(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.”
As enacted in 1993, RFRA applied to both the Federal Government and the States, but the constitutional authority invoked for regulating federal and state agencies differed. As applied to a federal agency, RFRA is based on the enumerated power that supports the particular agency’s work, but in attempting to regulate the States and their subdivisions, Congress relied on its power under Section 5 of the Fourteenth Amendment to enforce the First Amendment. In City of Boerne, however, we held that Congress had overstepped its Section 5 authority because “[t]he stringent test RFRA demands” “far exceed[ed] any pattern or practice of unconstitutional conduct under the Free Exercise Clause as interpreted in Smith.”
Following our decision in City of Boerne, Congress passed the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA). That statute, enacted under Congress’s Commerce and Spending Clause powers, imposes the same general test as RFRA but on a more limited category of governmental actions. And, what is most relevant for present purposes, RLUIPA amended RFRA’s definition of the “exercise of religion.” Before RLUIPA, RFRA’s definition made reference to the First Amendment. See §2000bb–2(4) (1994 ed.) (defining “exercise of religion” as “the exercise of religion under the First Amendment”). In RLUIPA, in an obvious effort to effect a complete separation from First Amendment case law, Congress deleted the reference to the First Amendment and defined the “exercise of religion” to include “any exercise of religion, whether or not compelled by, or central to, a system of religious belief.” And Congress mandated that this concept “be construed in favor of a broad protection of religious exercise, to the maximum extent permitted by the terms of this chapter and the Constitution.”
At issue in these cases are HHS
regulations promulgated under the Patient Protection and
Affordable Care Act of 2010. ACA generally requires
employers with 50 or more full-time employees to offer“a
group health plan or group health insurance coverage”
that provides “minimum essential coverage.” Any covered
employer that does not provide such coverage must pay a
substantial price. Specifically, if a covered employer
provides group health insurance but its plan fails to
comply with ACA’s group-health-plan requirements, the
employer may be required to pay $100 per day for each
affected “individual.” And if the employer decides to
stop providing health insurance altogether and at least
one full-time employee enrolls in a health plan and
qualifies for a subsidy on one of the government-run ACA
exchanges, the employer must pay $2,000 per year for
each of its full-time employees.
Unless an exception applies, ACA
requires an employer’s group health plan or
group-health-insurance coverage to furnish “preventive
care and screenings” for women without “any cost sharing
requirements.” Congress itself, however, did not specify
what types of preventive care must be covered. Instead,
Congress authorized the Health Resources and Services
Administration (HRSA), a component of HHS, to make that
important and sensitive decision. The HRSA in turn
consulted the Institute of Medicine, a nonprofit group
of volunteer advisers, in determining which preventive
services to require.
In August 2011, based on the Institute’s recommendations, the HRSA promulgated the Women’s Preventive Services Guidelines. The Guidelines provide that nonexempt employers are generally required to provide “coverage, without cost sharing” for “[a]ll Food and Drug Ad-ministration [(FDA)] approved contraceptive methods, sterilization procedures, and patient education and counseling.” Although many of the required, FDA-approved methods of contraception work by preventing the fertilization of an egg, four of those methods (those specifically at issue in these cases) may have the effect of preventing an already fertilized egg from developing any further by inhibiting its attachment to the uterus.
HHS also authorized the HRSA to
establish exemptions from the contraceptive mandate for
“religious employers.” That category encompasses
“churches, their integrated auxiliaries, and conventions
or associations of churches,” as well as “the
exclusively religious activities of any religious
order.” In its Guidelines, HRSA exempted these
organizations from the requirement to cover
In addition, HHS has effectively exempted certain religious nonprofit organizations, described under HHS regulations as “eligible organizations,” from the contraceptive mandate. When a group-health-insurance issuer receives notice that one of its clients has invoked this provision, the issuer must then exclude contraceptive coverage from the employer’s plan and provide separate payments for contraceptive services for plan participants without imposing any cost-sharing requirements on the eligible organization, its insurance plan, or its employee beneficiaries. Although this procedure requires the issuer to bear the cost of these services, HHS has determined that this obligation will not impose any net expense on issuers because its cost will be less than or equal to the cost savings resulting from the services.
In addition to these exemptions for
religious organizations, ACA exempts a great many
employers from most of its coverage requirements.
Employers providing “grandfathered health plans”—those
that existed prior to March 23, 2010, and that have not
made specified changes after that date—need not comply
with many of the Act’s requirements, including the
contraceptive mandate. And employers with fewer
than 50 employees are not required to provide health
insurance at all.
David and Barbara Green and their three children are Christians who own and operate two family businesses. Forty-five years ago, David Green started an arts-and-crafts store that has grown into a nationwide chain called Hobby Lobby. There are now 500 Hobby Lobby stores, and the company has more than 13,000 employees. Hobby Lobby is organized as a for-profit corporation under Oklahoma law.
One of David’s sons started an affiliated business, Mardel, which operates 35 Christian bookstores and employs close to 400 people. Mardel is also organized as a for-profit corporation under Oklahoma law.
Though these two businesses have expanded over the years, they remain closely held, and David, Barbara, and their children retain exclusive control of both companies. David serves as the CEO of Hobby Lobby, and his three children serve as the president, vice president, and vice CEO.
Hobby Lobby’s statement of purpose commits the Greens to “[h]onoring the Lord in all [they] do by operating the company in a manner consistent with Biblical principles.” Each family member has signed a pledge to run the businesses in accordance with the family’s religious beliefs and to use the family assets to support Christian ministries. In accordance with those commitments, Hobby Lobby and Mardel stores close on Sundays, even though the Greens calculate that they lose millions in sales annually by doing so. The businesses refuse to engage in profitable transactions that facilitate or promote alcohol use; they contribute profits to Christian missionaries and ministries; and they buy hundreds of full-page newspaper ads inviting people to “know Jesus as Lord and Savior.”
The Greens believe that life begins at conception and that it would violate their religion to facilitate access to contraceptive drugs or devices that operate after that point....Although their group-health-insurance plan predates the enactment of ACA, it is not a grandfathered plan because Hobby Lobby elected not to retain grandfathered status before the contraceptive mandate was proposed.
The Greens, Hobby Lobby, and Mardel sued HHS and other federal agencies and officials to challenge the contraceptive mandate under RFRA and the Free Exercise Clause. The District Court denied a preliminary injunction and the plaintiffs appealed, moving for initial en banc consideration. The Tenth Circuit granted that motion and reversed in a divided opinion. Contrary to the conclusion of the Third Circuit, the Tenth Circuit held that the Greens’ two for-profit businesses are “persons” within the meaning of RFRA and therefore may bring suit under that law.
The court then held that the corporations had established a likelihood of success on their RFRA claim. The court concluded that the contraceptive mandate substantially burdened the exercise of religion by requiring the companies to choose between “compromis[ing] their religious beliefs” and paying a heavy fee—either “close to $475 million more in taxes every year” if they simply refused to provide coverage for the contraceptives at issue, or “roughly $26 million” annually if they “drop[ped] health-insurance benefits for all employees.” Id., at 1141.
The court next held that HHS had failed to demonstrate a compelling interest in enforcing the mandate against the Greens’ businesses and, in the alternative, that HHS had failed to prove that enforcement of the mandate was the “least restrictive means” of furthering the Government’s asserted interests. After concluding that the companies had “demonstrated irreparable harm,” the court reversed and remanded for the District Court to consider the remaining factors of the preliminary-injunction test.
We granted certiorari.
RFRA prohibits the “Government [from] substantially burden[ing] a person’s exercise of religion even if the burden results from a rule of general applicability” unless the Government “demonstrates that application of the burden to the person—(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.” The first question that we must address is whether this provision applies to regulations that govern the activities of for-profit corporations like Hobby Lobby, Conestoga, and Mardel.
HHS contends that neither these companies nor their owners can even be heard under RFRA. According to HHS, the companies cannot sue because they seek to make a profit for their owners, and the owners cannot be heard because the regulations, at least as a formal matter, apply only to the companies and not to the owners as individuals. HHS’s argument would have dramatic consequences.
Consider this Court’s decision in Braunfeld v. Brown, 366 U. S. 599 (1961). In that case, five Orthodox Jewish merchants who ran small retail businesses in Philadelphia challenged a Pennsylvania Sunday closing law as a violation of the Free Exercise Clause. Because of their faith, these merchants closed their shops on Saturday, and they argued that requiring them to remain shut on Sunday threatened them with financial ruin. The Court entertained their claim (although it ruled against them on the merits), and if a similar claim were raised today under RFRA against a jurisdiction still subject to the Act (for example, the District of Columbia), the merchants would be entitled to be heard. According to HHS, however, if these merchants chose to incorporate their businesses—without in any way changing the size or nature of their businesses—they would forfeit all RFRA (and free-exercise) rights. HHS would put these merchants to a difficult choice: either give up the right to seek judicial protection of their religious liberty or forgo the benefits, available to their competitors, of operating as corporations.
As we have seen, RFRA was designed to provide very broad protection for religious liberty. By enacting RFRA, Congress went far beyond what this Court has held is constitutionally required. Is there any reason to think that the Congress that enacted such sweeping protection put small-business owners to the choice that HHS suggests? An examination of RFRA’s text, to which we turn in the next part of this opinion, reveals that Congress did no such thing.
As we will show, Congress provided protection for people like the Greens by employing a familiar legal fiction: It included corporations within RFRA’s definition of “persons.” But it is important to keep in mind that the purpose of this fiction is to provide protection for human beings. A corporation is simply a form of organization used by human beings to achieve desired ends. An established body of law specifies the rights and obligations of the people (including shareholders, officers, and employees) who are associated with a corporation in one way or another. When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of these people. For example, extending Fourth Amendment protection to corporations protects the privacy interests of employees and others associated with the company. Protecting corporations from government seizure of their property without just compensation protects all those who have a stake in the corporations’ financial well-being. And protecting the free-exercise rights of corporations like Hobby Lobby protects the religious liberty of the humans who own and control those companies.
In holding that Conestoga, as a “secular, for-profit corporation,” lacks RFRA protection, the Third Circuit wrote as follows:
“General business corporations do not,
separate and apart from the actions or belief
systems of their individual owners or employees,
exercise religion. They do not pray, worship, observe
sacraments or take other religiously-motivated actions
separate and apart from the intention and direction of
their individual actors.”
All of this is true—but quite beside the point. Corporations, “separate and apart from” the human beings who own, run, and are employed by them, cannot do anything at all....
For all these reasons, we hold that a federal regulation’s restriction on the activities of a for-profit closely held corporation must comply with RFRA.
Because RFRA applies in these cases, we must next ask whether the HHS contraceptive mandate “substantially burden[s]” the exercise of religion. We have little trouble concluding that it does.
As we have noted, the Greens have a sincere religious belief that life begins at conception. They therefore object on religious grounds to providing health insurance that covers methods of birth control that, as HHS acknowledges, may result in the destruction of an embryo. By requiring the Greens and their companies to arrange for such coverage, the HHS mandate demands that they engage in conduct that seriously violates their religious beliefs.
If the Greens and their companies do
not yield to this demand, the economic consequences will
Since the HHS contraceptive mandate
imposes a substantial burden on the exercise of
religion, we must move on and decide whether HHS has
shown that the mandate both “(1) is in furtherance of a
compelling governmental interest; and (2) is the least
restrictive means of furthering that compelling
HHS asserts that the contraceptive mandate serves a variety of important interests, but many of these are couched in very broad terms, such as promoting “public health” and “gender equality.” RFRA, however, contemplates a “more focused” inquiry: It “requires the Government to demonstrate that the compelling interest test is satisfied through application of the challenged law ‘to the person’—the particular claimant whose sincere exercise of religion is being substantially burdened.” This requires us to “loo[k] beyond broadly formulated interests” and to “scrutinize the asserted harm of granting specific exemptions to particular religious claimants”—in other words, to look to the marginal interest in enforcing the contraceptive mandate in these cases.
In addition to asserting these very
broadly framed interests, HHS maintains that the mandate
serves a compelling interest in ensuring that all women
have access to all FDA-approved contraceptives without
cost sharing. Under our cases, women (and men)
have a constitutional right to obtain contraceptives,
see Griswold v. Connecticut (1965),
and HHS tells us that “studies have demonstrated
that even moderate co-payments for preventive services
can deter patients from receiving those services.”
We find it unnecessary to adjudicate this issue. We will assume that the interest in guaranteeing cost-free access to the four challenged contraceptive methods is compelling within the meaning of RFRA, and we will proceed to consider the final prong of the RFRA test, i.e., whether HHS has shown that the contraceptive mandate is “the least restrictive means of furthering that compelling governmental interest.” §2000bb–1(b)(2).
The least-restrictive-means standard is exceptionally demanding, and it is not satisfied here. HHS has not shown that it lacks other means of achieving its desired goal without imposing a substantial burden on the exercise of religion by the objecting parties in these cases. The most straightforward way of doing this would be for the Government to assume the cost of providing the four contraceptives at issue to any women who are unable to obtain them under their health-insurance policies due to their employers’ religious objections. This would certainly be less restrictive of the plaintiffs’ religious liberty, and HHS has not shown that this is not a viable alternative. HHS has not provided any estimate of the average cost per employee of providing access tothese contraceptives, two of which, according to the FDA, are designed primarily for emergency use....It seems likely that the cost of providing the forms of contraceptives at issue in these cases (if not all FDA-approved contraceptives) would be minor when compared with the overall cost of ACA.... If, as HHS tells us, providing all women with cost-free access to all FDA-approved methods of contraception is a Government interest of the highest order, it is hard to understand HHS’s argument that it cannot be required under RFRA to pay anything in order to achieve this important goal.
HHS contends that RFRA does not
permit us to take this option into account because “RFRA
cannot be used to require creation of entirely new
we see nothing in RFRA that supports this argument, and
drawing the line between the “creation of an entirely
new program” and the modification of an existing program
(which RFRA surely allows) would be fraught with
In the end, however, we need not rely on the option of a new, government-funded program in order to conclude that the HHS regulations fail the least-restrictive-means test. HHS itself has demonstrated that it has at its disposal an approach that is less restrictive than requiring employers to fund contraceptive methods that violate their religious beliefs. As we explained above, HHS has already established an accommodation for nonprofit organizations with religious objections. Under that accommodation, the organization can self-certify that it opposes providing coverage for particular contraceptive services. If the organization makes such a certification, the organization’s insurance issuer or third-party administrator must “[e]xpressly exclude contraceptive coverage from the group health insurance coverage provided in connection with the group health plan” and “[p]rovide separate payments for any contraceptive services required to be covered” without imposing “any cost-sharing requirements . . . on the eligible organization, the group health plan, or plan participants or beneficiaries.”
We do not decide today whether an approach of this type complies with RFRA for purposes of all religious claims. At a minimum, however, it does not impinge on the plaintiffs’ religious belief that providing insurance coverage for the contraceptives at issue here violates their religion, and it serves HHS’s stated interests equally well.
The principal dissent identifies no reason why this accommodation would fail to protect the asserted needs of women as effectively as the contraceptive mandate, and there is none....
HHS and the principal dissent argue that a ruling in favor of the objecting parties in these cases will lead to a flood of religious objections regarding a wide variety of medical procedures and drugs, such as vaccinations and blood transfusions, but HHS has made no effort to substantiate this prediction. HHS points to no evidence that insurance plans in existence prior to the enactment of ACA excluded coverage for such items. Nor has HHS provided evidence that any significant number of employers sought exemption, on religious grounds, from any of ACA’s coverage requirements other than the contraceptive mandate.
It is HHS’s apparent belief that no insurance-coverage mandate would violate RFRA—no matter how significantly it impinges on the religious liberties of employers—that would lead to intolerable consequences. Under HHS’s view, RFRA would permit the Government to require all employers to provide coverage for any medical procedure allowed by law in the jurisdiction in question—for instance, third-trimester abortions or assisted suicide. The owners of many closely held corporations could not in good conscience provide such coverage, and thus HHS would effectively exclude these people from full participation in the economic life of the Nation. RFRA was enacted to prevent such an outcome.
In any event, our decision in these cases is concerned solely with the contraceptive mandate. Our decision should not be understood to hold that an insurance-coverage mandate must necessarily fall if it conflicts with an employer’s religious beliefs. Other coverage requirements, such as immunizations, may be supported by different interests (for example, the need to combat the spread of infectious diseases) and may involve different arguments about the least restrictive means of providing them.
The principal dissent raises the possibility that discrimination in hiring, for example on the basis of race, might be cloaked as religious practice to escape legal sanction. Our decision today provides no such shield. The Government has a compelling interest in providing an equal opportunity to participate in the workforce without regard to race, and prohibitions on racial discrimination are precisely tailored to achieve that critical goal....
Congress, in enacting RFRA, took the position that “the compelling interest test as set forth in prior Federal court rulings is a workable test for striking sensible balances between religious liberty and competing prior governmental interests.” The wisdom of Congress’s judgment on this matter is not our concern. Our responsibility is to enforce RFRA as written, and under the standard that RFRA prescribes, the HHS contraceptive mandate is unlawful.
The contraceptive mandate, as applied to closely held corporations, violates RFRA. Our decision on that statutory question makes it unnecessary to reach the First Amendment claim.
The judgment of the Tenth Circuit in No. 13–354 is affirmed; the judgment of the Third Circuit in No. 13–356 is reversed, and that case is remanded for further proceedings consistent with this opinion.
It is so ordered.