By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.
You probably think this column is being written by a columnist. It’s not. Legally, it’s being written by a corporation, Steve Brawner Communications, Inc.
Steve Brawner Communications, Inc. – in the eyes of the IRS, an “S Corporation” – copyrighted the material, bills your news provider, and writes a paycheck to its only full-time employee, Steve Brawner.
Last week, the Supreme Court declared 5-4 that the federal government under Obamacare could not require another S Corporation, Hobby Lobby, to pay for insurance that covers four types of birth control for its employees – two interuterine devices and two types of the so-called “morning after pill” – because the family that owns the corporation considers those to cause abortions. The Court drew a distinction between public corporations with many stockholders and a closely held corporation owned by only a few people – in this case, founder and CEO David Green and his family.
Among the arguments opposing the decision, voiced by politicians and pundits, is that the Supreme Court has decreed that employers can force their religious beliefs on their employees.
That’s not even remotely what has happened. All the Supreme Court has said is that a closely held corporation should not be required to pay to insure forms of birth control that its owners consider to cause abortions. Hobby Lobby employees are free to purchase those services on their own or to go to work for a company whose insurance does cover them. Or they can take advantage of one of the 16 types of birth control that Hobby Lobby is willing to cover.
The federal government under Obamacare gave the Greens three choices: cover those services; don’t provide health insurance and pay an annual penalty of $26 million; or face annual fines up to $475 million, which would have put Hobby Lobby out of business. Hobby Lobby has 23,000 employees.
The Court specifically said the decision applies to “only the contraceptive mandate,” but in her dissent, Justice Ruth Bader Ginsburg wrote that the Court has waded into a legal minefield. Who could decide if one religious objection is legitimate while another can be ignored?
Ginsburg has a point. But that’s the thing about these hard cases – they’re hard. That’s why we have courts and legislatures, so we can tackle these issues one at a time, attempting to formulate general legal principles while also being flexible based on the facts of an individual case. Very few of us would argue that an employer could have a religious reason to practice racial discrimination, for example, but on abortion Americans are deeply divided. True, it was difficult for the government to accommodate the Greens’ religious beliefs, but does that mean it shouldn’t have even tried?
The mixed public reaction to this case is about more than Hobby Lobby, birth control, or even abortion. At its heart, it’s also about what people think about corporations, the people who own them, and the people who work for them. During the past few decades, Americans have watched corporations off-shore jobs and manipulate the political system to their advantage. It’s no wonder that many Americans identify more with the employee than the employer.
The Court does not see it that way. In its decision, it used some of the same “corporations are people” logic that it used in the Citizens United decision that removed limits on corporate political spending.
“A corporation is simply a form of organization used by human beings to achieve desired ends. … When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of these people,” Justice Samuel Alito wrote in the Hobby Lobby decision.
So if you start a company and then incorporate it, is it still an extension of you? Five Supreme Court justices say yes, and four say no.
I’m watching how this unfolds. Whatever the federal government can enforce regarding an S Corporation with 23,000 employees, it probably can do to an S Corporation with one.