What They Mean for Employers
Burwell v. Hobby Lobby Stores Inc[JS1] .
On its last day of the term, the
Supreme Court for the first time ruled, 5-4, that privately held corporations
can have religious beliefs and concluded that the government cannot make all private
employers cover the cost of contraceptive services. This decision undercuts a provision
of the Affordable Care Act (“ACA”) that requires that certain preventive
services, including birth control, be included in all health insurance plans.
The three businesses that were
the subject of the two cases before the Court were owned and run by two
different families both composed of a couple and their three children. Both families argued that the ACA’s mandate
conflicted with their sincerely held religious beliefs. Opponents argued that
corporations had no right to the free exercise of religion. Sidestepping any need to rule on the rights of
publically traded companies, which it viewed as unlikely to be run on religious
principles, the Court determined that the companies in these cases are closely
held corporations, each owned and controlled by members of a single
family.
While ruling that the closely
held corporations at issue in the case could object to providing the ACA
required benefits on the basis of sincerely held religious beliefs, the Court
provided no further direction on whether such a rule would extend to closely
held companies with larger pools of owners or owners with more attenuated
relationships.
The Court also did not offer any
guidance on who will bear the costs of providing the mandated preventative
services in the event that a company refuses to on the basis of a religious
objection, but did suggest that a similar system could be adopted as is
currently in place for religious non-profits whereby the insurance companies
provide the preventative services but with no cost sharing to the employer, the
employer’s plan or the employees.
Lesson for Employers:
Some employers who are otherwise obligated
under the ACA to provide preventative services as part of their health plan may
now be able assert religious objections to this obligation. However
which employers can assert this objection and, how such an objection will be
reviewed and handled is yet unclear. Additionally, it is yet unclear for employee
what it will mean for them and the services that they receive under their
health plans. Litigation under the new
Supreme Court ruling is already underway so, as usual, stay tuned for further
developments.
NLRB v. Noel Canning[JS2] .
On April 26, 2014, the U.S.
Supreme Court issued a unanimous decision which renders invalid all actions
taken by the NLRB between January 2012 and July 2013.
The Court’s decision is notable
for all employers, particularly in light of the fact that the NLRB has
increasingly begun reaching beyond unionized workplaces and issuing decisions
with broad implications for employers of all types (the Banner Health
Systems decision
that we previously examined[JS3] is just one example of a
broad NLRB decision that has now been invalidated).
As we previously reported[JS4] ,
the Noel Canning case centered on the question of whether President Obama had
the authority to exercise his recess appointment power to appoint three new
members of the NLRB in January 2012 when the Senate was holding pro forma
sessions but taking no actions. The
Justices unanimously agreed that appointments were invalid because the Senate
was not in fact in recess when they were made (though the Justices were split
about the President’s right of appointment when the Senate is, in fact, in
recess).
Although much of the focus
surrounding the decision has been centered on its larger implication for
constitutional law and the balance of power between the branches of government,
the bottom line is that it also wipes clean 19 months of NLRB decisions between
January 2012, when the recess appointments were made, and July 2013 when the
Board was fully and properly constituted.
It remains to be seen precisely
how the NLRB itself will react to this decision. While there has been much discussion of this
case, it is not likely to change the NLRB’s aggressive approach to the
non-union workplace issues it has been pursuing. It has attacked social media policies,
employer handbook and severance agreement policies, all on the ground that they
interfere with employees’ rights to engage in concerted action to challenge
their wages and working conditions.
Lesson for Employers:
The
standoff over NLRB members has ended and the Obama Administration NLRB has a
full complement of members confirmed by the Senate, with a Democratic
majority. Employers should expect the
NLRB to affirm prior opinions issued between January 2012 and July 2013 which
the Supreme Court invalidated. Close
watchers of NLRB precedent believe that the need to address the old cases will
cause a backlog affecting other priorities.
Whatever happens with these, employers can assume that the aggressive
NLRB positions taken in the invalidated decisions will continue. Employer should look closely at policies that
can be expected to come under attack.
By Hope Eastman and Jessica Summers
