Hobby Lobby Post-Mortem Part 11: How RFRA Connects Social Conservatism to Libertarianism

by Michael Dorf

Regular readers of this blog will recall that in June and July, Professors Buchanan, Colb, and I wrote a series of ten posts on the Hobby Lobby case (found at 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10) as well as two Verdict columns (here and here). Having thus devoted a great deal of thought to all of the issues surrounding Hobby Lobby, I was happy to agree to participate in a "debate" on the merits of the case sponsored by the Cornell Law School chapter of the Federalist Society. Thus, on Monday of this week, I debated John Malcolm of the Heritage Foundation.

I put "debate" in quotation marks because the event was not, strictly speaking, a debate. I spoke for about 20 minutes, most of which was devoted to explaining to the audience (a majority of whom were 1Ls) exactly what was at stake in Hobby Lobby, and only in my last five minutes did I lay out some concerns, based mostly on my Verdict column. Mr. Malcolm then spoke for about 25 minutes, occasionally referring to my remarks to agree with my descriptive account of the issues. I used my 5-minute rebuttal to call attention to a few points of disagreement, simply so the audience would not go away feeling cheated. Q&A followed. Having said as much as I have already about Hobby Lobby, I did not expect Monday's debate to lead me to blog about the case yet again, but Mr. Malcolm's answers to a couple of audience questions has drawn me back in.

Unlike some of the past Fed Soc debates in which I have participated, this one was not recorded, so I'll have to paraphrase based on what I recall. I'll undoubtedly get some details wrong but I'm pretty confident that I have the big picture right.

Both in his affirmative presentaiton and partly in response to an audience member's question, Mr. Malcolm drew a distinction between the religious freedom of owners of businesses like Hobby Lobby and Conestoga Wood, on the one hand, and, on the other hand, the objection by employees and prospective employees who do not share the religious views of their employers. Such employees are not forbidden by their employers from obtaining the forms of contraception to which the business owners object, he said, because: a) they could pay for it out of pocket or pay out of pocket for a supplemental insurance plan that covers it; and b) most employers (I believe the figure he gave was 85%) do not have religious objections to providing health insurance that covers these forms of contraception, so the workers could go to work for one of those other firms.

In response to a), I noted that for low-wage employees, the out-of-pocket expenses could be prohibitive. In a follow-up, Professor Nelson Tebbe raised an objection to part b) of the foregoing response, explaining that ordinarily if the government provides some protection for employees, an employer cannot avoid its obligations simply because there may be other employers who satisfy them. He gave an example of an employer who invokes RFRA to defend against a charge of religious discrimination by saying that his (or in the case of a corporation, its) religion requires that only co-religionists be hired.

Before coming to Mr. Malcolm's reply, here's a little background regarding Prof. Tebbe's question. Title VII exempts religious non-profits from the prohibition on religious discrimination, and that exemption was upheld against an Establishment Clause challenge in Corp. of Presiding Bishop v. Amos. Meanwhile, in the Hosanna-Tabor case, the Supreme Court held that the Free Exercise Clause requires a "ministerial exemption" from other kinds of antidiscrimination law. But I think it is clear that--absent a valid RFRA claim--neither Title VII itself nor the Constitution would entitle the religious owners of a for-profit business to escape Title VII liability for discrimination on the basis of religion.

So, how did Mr. Malcolm answer Prof. Tebbe's question? He did not directly address it. Like Justice Alito in his Hobby Lobby majority opinion, Mr. Malcolm said that there is a compelling interest in combating race discrimination, and he seemed to admit that Title VII's prohibition on such race discrimination was narrowly tailored. Why he admitted the latter is not entirely clear. My guess is that many fewer than 15% of businesses would seek a religious exemption from Title VII's prohibition on race discrimination, so if it is a sufficient answer to the women denied contraception that they can find other employment, I don't know why it's not a sufficient answer to the people denied jobs based on race that they can find other employment. I suspect that both Justice Alito and Mr. Malcolm sought to distinguish race cases because they felt some need to do so on political grounds. In any event, by not directly addressing the religion example posed by Prof. Tebbe, and by waxing poetic about how, in a free society, we must sometimes accept some burdens when other people exercise their freedoms, Mr. Malcolm pretty clearly indicated that he thought the race case was exceptional. Whatever he would have said if pressed to answer Prof. Tebbe's question directly, he did not back down from his general view that employees and prospective employees should have to bear the burden of the exercise of freedom by their employers.

Now, as a description of positive law, I think there is probably something to be said for Mr. Malcolm's view. To return to the facts of Hobby Lobby, the female employees are not asserting that they have a religious obligation to use the particular forms of birth control, and even if they were, that would not make out a RFRA claim, because it is their private employer, rather than the government, that is denying them the coverage they seek. So the issue of the employees' need/desire for the particular forms of birth control enters into the equation by way of the compelling interest test. We ask whether there is a compelling government interest in providing them with the birth control, and if so, whether having it come via health insurance provided by their religiously scrupled employer is narrowly tailored to that interest; we do not ask whether the employees themselves have a religious or other right to the contraception, because they do not.

But Mr. Malcolm did not simply give the foregoing answer (although I think what he said included the foregoing, at least implicitly). He didn't just say that the combination of RFRA and the state action doctrine means that the employers have a claim but the employees don't. He thought that this was the normatively right answer, on libertarian grounds. Why? I think the answer is pretty clear from libertarian thought generally, which goes like this:

In an unregulated market, some employers would offer health insurance; others would not. Some of the employers that offered health insurance would include coverage of all forms of contraception; others, including those with religious scruples against what they consider abortifacients, would not. Employees would be free to accept or reject employment based on the package of salary, conditions, and benefits--including health insurance--offered. Thus, in an unregulated market, religious freedom for employers would simply be a result of economic freedom. Ideally, the government would not interfere with the market at all, but if the government does interfere--as by enacting the Affordable Care Act (ACA)--then it at least should grant exceptions to those who are most burdened by the interference, namely those for whom compliance with government regulation conflicts with religious conscience.

The main problem with this story is its initial premise that absent laws like the ACA, the employment market would be unregulated. As legal realists have been pointing out for over a century, law plays an essential role in creating the conditions for market exchange, by protecting property rights, enforcing contracts, etc. So the notion that the ACA or antidiscrimination law interferes with a domain of pre-political freedom is highly problematic. It only makes sense in the Lochnerian world in which the common law is taken for granted as a neutral baseline. If, instead, one begins with the much more realistic notion that the law will inevitably play an essential role in the marketplace, then one needs to offer a normative justification for preferring the freedom of the employers over the often-fictive freedom of the employees to choose where, when, and how to sell their labor.

My goal here is not to rehash the legal realist critique of libertarianism. Instead, I simply want to make an observation (for which Prof. Colb deserves credit, having made the suggestion to me in conversation a while ago): A case like Hobby Lobby is wonderful for the right because it brings together two strands of conservative thought that often pull in opposite directions--social conservatism and libertarianism. Social conservatives like the result and reasoning of Hobby Lobby because it is anti-abortion in the particulars and more generally it provides religious traditionalists with grounds for opting out of progressive regulation; libertarians like the result and reasoning of Hobby Lobby because it recognizes market freedom as a core liberty.

Meanwhile, religious exceptions cases are more ambiguous for liberals (like me). Even while rejecting the libertarian view of the market as neutral, many liberals still support RFRA or its state-level equivalent because we recognize that religious liberty is important, and because we worry that facially neutral laws will sometimes impose serious burdens on members of minority religious groups (like the Native American plaintiffs in the Smith case).

Given these considerations, it is not really surprising that my debate with Mr. Malcolm was not a debate in the sense of two people offering opposite positions. My view is that religious exceptions cases pose hard questions about how to trade off important goals on both sides. His view (and the view of conservatives more generally) is that the issue is just about wholly one-sided.