Just days before the Health and Human Services contraceptive mandate went into effect, a federal district court in Colorado issued a temporary injunction exempting a Denver based company from its application. (See ruling in Newland v. Sebelius here). The controversial HHS rule requires all employer provided health coverage, with limited exceptions for certain religious organizations, to cover FDA approved contraceptive methods (which include sterilization and abortifacient drugs) at no cost to the employee. Since the publication of the final rule in January, HHS has come under fire for refusing to provide a broader exemption for religious organizations such as hospitals, schools, colleges, and charities. (See our post on the subject here). Nearly 60 different religious organzations, including the University of Notre Dame, have sued HHS Secretary Sebelius to block application of the rule to their organizations.
The Colorado ruling is remarkable, however, because the plaintiff is not a religious organization but a private corporation that manufactures heating, air conditioning and ventilation products. The owners of Hercules Industries are a Catholic family who strives to operate their business consistent with the teachings of the Church. Hercules has a self-insured health plan for its employees that does not cover contraception, abortion, or sterilization. The HHS mandate would have forced Hercules health plan to cover these items effective August 1, 2012.
The Hercules Inudstries case presents a very important question whether a corporation operating in the secular, commerical world has the right to operate consistent with the religious principles of its owners. For decades employees have had the right to exercise their religion in the workplace so long as it does not create an undue hardship to the operation of the employer’s business. Hercules Industries does not have the right to refuse to hire non-Catholics or to force its employees to practice the Catholic Faith. Should an employer have a similar right to accomodation from a government rule that imposes an obligation contrary the the religious faith of its owners, so long as it does not interfere with the rights of its employees?
As shown by the recent efforts of several big-city Mayors to ban Chick-Fil-A because of statements made by one of its owners, the issue of an employer’s religious liberty is not limited to contraceptive coverage in health insurance. In the Hercules case, the government took the position that a private corporation engaging in commerce has no religious rights. Senior District Judge Kane rejected that position, at least for now. The temporary injunction means only that the court believes there is a "likelihood of success" on the merits, subject to a final ruling after all the evidence and legal arguments are considered.
Jon Hyman of Ohio Employer’s Law Blog posted an excelleing piece several months ago proposing an Employer’s Bill of Rights to balance the many rights their employees posess. Perhaps the right of a business owner to practice his or her religion in the workplace could be added to the list.