Hobby Lobby Case: Does God Hate Obamacare?
The Green family prayed on the morning of March 25, as they do every morning. Then they entered the Supreme Court through a side door and took seats in the second row of the public section to hear arguments in Case No. 13-354: Sebelius v. Hobby Lobby Stores. Barbara and David Green, along with their three children, own Hobby Lobby, a national chain of 609 craft stores. Actually, the Greens believe that God owns Hobby Lobby. They are evangelical Christians who say they run their $3.3 billion company based on the teachings of the Bible. Their mission is to honor God with their work.
For the past year and a half, Hobby Lobby has sought a religious exemption from the Affordable Care Act’s requirement that employers providing health insurance cover all 20 federally approved methods of birth control. The company’s plan provides some birth control; the Greens object to Hobby Lobby having to cover four kinds they say are tantamount to abortion. The family and its supporters hope the Supreme Court will rule that for-profit corporations have the same religious rights as individuals or actual churches. Such a decision could potentially give companies sweeping powers to opt out of laws they find immoral, perhaps those concerning discrimination, the minimum wage, family leave, maybe even taxation.
The Greens may not have such ambitions. “We want to continue to live out our faith in the way we do business,” Barbara said to reporters on the marble plaza of the Supreme Court after the 90-minute hearing concluded. “We believe no American should lose their religious freedom just because they open a family business.” Green, surrounded by other female members of the family, took no questions. It was snowing heavily, but hundreds of demonstrators remained on the sidewalk. They held posters: “Stand Up for Religious Freedom” and “#TeamLife” on one side, and on the other “No Bosses in My Bedroom” and “This Is Not a Healthcare Plan” written above a picture of the Bible. Men knelt in prayer. A woman was dressed as a pack of birth control pills. Someone played a bagpipe. Members of the Becket Fund for Religious Liberty, whose lawyers had recruited the Greens to take a legal stand, posed for photos. They had brought the case of the year.
Hobby Lobby, started in Oklahoma City and very much a product of the suburban Sunbelt, is one of many companies run by religious families who believe their faith has to inform their economic life and vice versa. Chick-fil-A used to be the best known among them. “They think making a buck is a religious mission,” says Darren Grem, a historian at the University of Mississippi who researches businesses in born-again America. “This isn’t backwoods evangelicalism, it’s business-class evangelicalism.”
David Green is worth $3.6 billion, according to Bloomberg data. The family spends more than one-third of the company’s annual profits on evangelical causes. Most publicly, they bailed out the indebted and scandal-plagued Oral Roberts University in 2007. There is a business advantage to their giving at tax time. “It’s just a way to expand on what we do in ministry without costing us a lot of money,” Green told Charisma, a Pentecostal magazine, in 2005. “I could live the way I do with 10 stores. So why do we want 500 stores? So we can tell more people about Christ.”
Hobby Lobby plans to open dozens more stores this year. It will soon have at least one store in 47 of the lower 48 states. All five of the Greens have signed a covenant declaring their religious faith and committing to run the business accordingly. The company is set up so that no one in the family will profit from its sale; 90 percent of the proceeds would be set aside for their favored ministries. David Green says he had a revelation while praying in his backyard. As he explained it in 2012 to the High Calling website, he put up a note afterward at the headquarters for everyone to see: “Hobby Lobby belongs to me—God.”
The company’s stores average 55,000 square feet and carry almost 70,000 items, including frames, silk flowers, potted plants, posters, wicker baskets, ribbon, cloth, yarn, birdhouses, wind chimes, stationery, soap-making kits, candle-making kits, wreath-making kits, crosses of every size, prints of the Last Supper, and “Open Your Door to Jesus” cards that hang on doorknobs. A decorative wooden sign that says “I Can Do All Things Through Christ” might be near one that says “Life is better by the pool.” There are shelves for “men’s metal and wood décor” and others for antler décor. The music in the stores is a custom-made instrumental mix of Christian songs.
David, who’s 72 and serves as the company’s chief executive officer, comes from a religious family: His father was a minister, his brothers became ministers, and his sisters married ministers. Green, though, wasn’t much of a public speaker and found his calling in retail. “I am anointed to do what I do,” he told High Calling. (Green declined to comment for this story.) He and Barbara started a business making frames in their home in 1970 and two years later opened their first arts and crafts store in Oklahoma City. Their best-selling item was beads. The Greens were always devout, but their company wasn’t always as overtly religious as it is now.
The late 1970s and early 1980s were prosperous years in Oklahoma and Texas. People were flush from the oil boom, and Hobby Lobby began selling them more expensive items: luggage, grandfather clocks, gourmet food, $2,000 pieces of art, $300 miniature brass oil rigs. In 1985, when Hobby Lobby had 11 stores, the local economy crashed. The company lost almost $1 million that year and neared bankruptcy. Green cut costs, laid off staff, and prayed, sometimes under his desk, as he tells it in his 2005 autobiography, More Than a Hobby. Eventually Hobby Lobby’s fortunes revived. “I had to become small so God could be big,” Green wrote. “There is a God and he’s not averse to business. … He understands margins and spreadsheets, competition and profits.”
Over the next several years, Green and his son Steve, the president of the company, brought their evangelicalism into the workplace. They hired chaplains to organize Bible studies and offer spiritual guidance to employees at the Oklahoma City office. The family introduced a character-building program that had been designed for schools. Every month one trait—honesty, thriftiness, self-control—was emphasized during meetings at headquarters and across the chain. According to Green’s book, Steve began including a note with everyone’s Christmas bonus: “Along with this gift of appreciation, it is my hope that you have received the greatest gift ever given, the gift of eternal life. Jesus came to earth to save mankind and offers eternal life to whoever believes in him.”
When asked by High Calling if any employees had been put off by the promotion of Christianity at Hobby Lobby, Green replied: “We’ve had a couple of situations in which people have resigned. At this point no one has given us any legal issues. We would fight it. … We have a legal right to speak about what God has done for us.”
In 1997, distressed by the commercialism of Easter, Green placed a small ad in his local paper that showed a crown of thorns and encouraged readers to “believe in the love that sent Jesus Christ.” It was signed Hobby Lobby. Before long, the Greens were placing religious ads for Easter, Christmas, and even the Fourth of July in the main newspaper of every city where Hobby Lobby had a store. The ads, which still run, include the phone number of a counseling center the family supports: 1 888 NEED-HIM.
The Greens and their lawyers often point out that Hobby Lobby doesn’t open its stores on Sundays. That decision came more than two decades after the family began doing business. Green closed on Sundays for the first time in 1998, starting with three stores in Nebraska. “I didn’t have the courage—or faith—to shut down on Sunday all at once,” he wrote. He calculated that Hobby Lobby did $100 million in business on Sundays. By 2000 he’d come around, and signs were added on the front door of all the stores: “Closed Sundays to allow employees time for family & worship.” Michaels, the company’s bigger competitor, briefly put up its own signs: “Open on Sunday for the convenience of our customers.”
Retail is retail, though, and December is the busiest month. So occasionally employees at Hobby Lobby have to restock on Sundays, and occasionally they complain to headquarters. This doesn’t go over well with Green. “I should write back: ‘We never made an ironclad promise that no one would ever have to work on Sunday. Think about it: Isn’t it nice that you’ve had 49 or 50 Sundays off over the past year? Wouldn’t that be a reason to say thank you?’ ” he said in his book.
Green keeps tight control of Hobby Lobby and runs an operation at once anachronistic and progressive. At headquarters he decreed that no more than three people should be involved in final decisions. In the stores, which are all owned by the company, managers have little say in what they carry, only how much. Hobby Lobby doesn’t use bar codes; employees take inventory by hand every week, and cashiers ring up items without the benefit of scanners. Green believes this helps them know exactly what the stores are selling.
In 2009, Green decided to pay full-time hourly employees more than the federal minimum wage; the starting rate is now about $14 an hour. Hobby Lobby has 16,000 full-time employees who are eligible for health insurance, almost 70 percent of whom are women. The company’s 12,000 part-time and seasonal workers, however, make less and don’t qualify for insurance.
Hobby Lobby opened a medical clinic with no co-pays at its Oklahoma office in 2010. This, the higher wages, the Sundays off, and an early closing time of 8 p.m. every other day sometimes gives the wrong impression. “Is Hobby Lobby an easy place to work?” Green asked in his book. “Not necessarily. Some applicants who are fellow Christians of mine think I’ll be all nice and soft and sloppy in order not to hurt anyone’s feelings. That’s not the case at all. The Bible that I carry says, ‘Whatever you do, work at it with all your heart, as working for the Lord, not for men.’ ”
The Becket Fund, a nonprofit Washington law firm that describes itself as “at the crossroads of church and state” and defends several conservative causes, has devoted considerable resources to fighting the contraception requirement in the Affordable Care Act. It has filed eight other suits against the government on behalf of religious schools and nonprofits. Its lawyers called Hobby Lobby in 2012 to see if the family would also challenge the mandate. First, the Greens checked the company’s insurance plan; before then they hadn’t reviewed which forms of contraception it provided. After discovering the plan covered some of the four contraceptives they’re arguing about now—two intrauterine devices and two morning-after pills—the Greens removed them from the plan. Then, in September 2012, they filed their case in a federal district court in Oklahoma City. “I’m sure there are some of our employees who feel that we should provide that [contraception] as the mandate requires, but I think we have a large percentage that would support our position,” Steve Green told Bloomberg News in February.
On March 25, U.S. Solicitor General Donald Verrilli Jr., the Obama administration’s lawyer, argued that when a company incorporates, it agrees to comply with laws governing businesses. “You are making a choice to live by the rules that govern you and your competitors in the commercial sphere,” he said. He also made the case that under the Religious Freedom Restoration Act, passed by Congress in 1993, for-profit businesses were not given the rights individuals were. Indeed, a company should not be allowed to put the religious concerns of its owners above the rights of its employees.
Justices Sonia Sotomayor and Elena Kagan noted that companies might use Hobby Lobby’s argument to object to covering immunizations and blood transfusions; maybe they would claim religious exemptions from federal laws requiring minimum wages and barring the use of child labor. “You would see religious objectors come out of the woodwork with respect to all of these laws,” Kagan said.
Paul Clement, the lawyer for Hobby Lobby, argued that the exemption he was seeking would apply only to a small group of closely held companies. “We can talk about the extent and how you’d apply these principles to Exxon,” he said, “but I think that’s just something that’s not going to happen in the real world.”
No big public company has come out in support of Hobby Lobby. Nor has the U.S. Chamber of Commerce or any other business group that doesn’t have a religious affiliation. That’s most likely because the case aims to “pierce the corporate veil,” or look behind the corporation’s legal identity and base a ruling on the interests of its owners. Companies have rights: to own property, enter into contracts, sue in court. But a company is also separate from its owners. If there are legal claims, they fall on the company, not its investors. A ruling that blurs the distinction between the two could erode the legal protection owners and investors have.
Sotomayor noted that Hobby Lobby has a choice: It can end its health-care coverage and pay a tax of $2,000 per employee, or it can provide full contraceptive coverage. This, Kagan said, amounted to the government saying, “You can do this thing, or if this thing violates your religion, you can do another thing.”
The Greens haven’t yet decided what they will do if they lose the case. “All we know is what we won’t do and what we can’t do, and that is provide life-terminating drugs,” Steve said in February. In the meantime, he’s busy creating a Bible museum blocks from the Supreme Court. Scheduled to open in 2017, the museum will display the 40,000 biblical texts, artifacts, and antiquities he and his family have purchased in recent years. He also hopes to develop a nonsectarian public-school Bible curriculum.
“In some ways, the Supreme Court decision doesn’t matter for the broader mission of re-convincing the like-minded,” says Grem, the University of Mississippi historian. “If the case doesn’t go the Greens’ way, it will prove to the like-minded that they are religious victims. That’s crucial to the conservative evangelical movement.”
The Supreme Court’s ruling is due by early July. “We prayerfully await the justices’ decision,” Barbara said before she turned from the crowd and left with her family.
— With assistance by Greg Stohr