Kent Greenfield is one of the 44 law professors who signed that amicus brief in the Hobby Lobby and Conestoga Wood cases before the Supreme Court. In a Boston Globe op-ed, Greenfield argues that:
Hobby Lobby wants to be relieved of regulatory controls because of religious views. Such relief will give it an unfair advantage in the marketplace, since Hobby Lobby would not have to provide health coverage that its competitors still must.
The response to a Hobby Lobby victory will be quick. Companies will experience a Road to Damascus conversion like the Apostle Paul, discovering religious beliefs where they had none before. Companies will assert religious convictions inconsistent with whatever regulation they find obnoxious, and not just Obamacare’s contraceptive requirement. Some companies will claim a religious right to discriminate against gay job applicants. Others will insist a woman’s place is in the home, and claim a religious exemption to Title VII’s obligation that women be paid the same as men. And are we sure there are no companies that will assert a religious right to pollute?
Our public efforts to constrain business through regulation will be circumvented by assertions of religious belief, whether genuine, inflated, or fraudulent. Ironically perhaps, claims of religious conscience could liberate companies to become bad actors in the economy and society at large. Instead of sacrifice, corporate conscience could devolve to sacrilege.
The corporate law professors' brief makes a similar argument:
A competitive marketplace depends on the principle that competition among firms should be on grounds of efficiency, and should not depend on which companies are better at skirting legal obligations.
As a general matter, a corporation will enjoy a competitive advantage in the marketplace if it is exempted from otherwise generally applicable laws and regulations (namely, because the exemption will reduce the corporation’s costs of doing business). In this case, Hobby Lobby and Conestoga are asking to be relieved from providing a standard of health care coverage that their competitors are required to provide. Regardless of the companies’ purpose, the effect of their legal arguments would be to skew the level playing field of the market, giving an advantage to companies claiming regulatory exemptions. Companies that do not assert religious beliefs will find themselves competing at a disadvantage, on grounds that have nothing to do with efficiency.
...
Companies suffering a competitive disadvantage will simply claim a “Road to Damascus” conversion. A company will adopt a board resolution asserting a religious belief inconsistent with whatever regulation they find obnoxious, whether it be a state’s insistence that companies not discriminate on the basis of sexual orientation, Title VII’s obligation that women be paid the same as men, or PPACA’s requirement of providing health insurance that includes contraceptive coverage.
I find neither version of the competitive advantage argument persuasive. As I explain in my article A Critique of the Corporate Law Professors’ Amicus Brief in Hobby Lobby and Conestoga Wood (February 21, 2014), which is available at SSRN: http://ssrn.com/abstract=2399638, and will be forthcoming in a revised version later this month in the Virginia Law Review Online:
The most obvious defect in this argument is that it assumes that providing insurance to employees will put employers at a competitive disadvantage with competitors which do not provide such coverage. But the cost to the employer brings a benefit to the employee, which might well result in a competitive advantage to the employer.
Another difficulty with the argument is that the contraception mandate—and the ACA in general—is replete with regulatory exemptions:
In evaluating the government’s interest [in having Hobby Lobby and Conestoga Wood comply with the contraceptive mandate], … courts should note that the government has already undermined the mandate by carving out exemptions for grandfathered plans, employers with fewer than 50 employees, “member[s] of a recognized religious sect or division thereof” who have religious objections to the concept of health insurance, or religious employers [as defined in the regulations].” As Judge Walton observed, a “law cannot be regarded as protecting an interest of the highest order . . . when it leaves appreciable damage to that supposedly vital interest unprohibited.”[1]
As this author has further observed:
President Obama has unilaterally exempted (purportedly temporarily) a whole new category of employers. The WSJ explains:
ObamaCare requires businesses with 50 or more workers to offer health insurance to their workers or pay a penalty, but last summer the Treasury offered a year-long delay until 2015 despite having no statutory authorization. ...
Under the new Treasury rule, firms with 50 to 99 full-time workers are free from the mandate until 2016. And firms with 100 or more workers now also only need cover 70% of full-time workers in 2015 and 95% in 2016 and after, not the 100% specified in the law.
The new rule also relaxes the mandate for certain occupations and industries that were at particular risk for disruption, like volunteer firefighters, teachers, adjunct faculty members and seasonal employees. Oh, and the Treasury also notes that, “As these limited transition rules take effect, we will consider whether it is necessary to further extend any of them beyond 2015." So the law may be suspended indefinitely if the White House feels like it. [2]
… [President] Obama's action further eviscerates the argument that the government has a compelling interest in preventing Hobby Lobby and its ilk from following the religious beliefs of their shareholders. To paraphrase Judge Walton, a law cannot be regarded as protecting an interest of the highest order when the President gets to eviscerate that supposedly vital interest anytime he feels like it.[3]
[1] [Stephen M. Bainbridge, Using Reverse Veil Piercing to Vindicate the Free Exercise Rights of Incorporated Employers, 16 Green Bag 2d 235, 248 (2013).
[2] Obama Rewrites ObamaCare, The Wall Street Journal, Feb. 10, 2014, http://online.wsj.com/news/articles/SB10001424052702303650204579375310934336066.
[3] Stephen M. Bainbridge, The Import for Hobby Lobby of Obama's Unilateral Relief From the Obamacare Mandate for Businesses, ProfessorBainbridge.com (Feb. 11, 2014), http://www.professorbainbridge.com/professorbainbridgecom/2014/02/the-import-for-hobby-lobby-of-obamas-unilateral-relief-from-the-obamacare-mandate-for-businesses.html. Noting that “Hobby Lobby and Conestoga are for-profit corporations,” the brief explicitly declines to address whether limited liability companies (LLCs) or partnerships would have standing to vindicate the religious values of their owners or whether a “values pass-through” would be available with respect to such forms of business entities. Brief, supra note 12, at 1 n.2. If the rules are different for those forms, however, would they not likewise gain an unfair competitive advantage?
