The Supreme Court is expected to rule on one of the most controversial business cases in years. Get ready.

By Jeremy Quittner

In two of the most closely watched Supreme Court cases this year, the nation’s top justices could rule as soon as Thursday about whether businesses are entitled to religious exemptions that would give them special carve-outs for their health care plans. A positive outcome for the plaintiffs could also open the door to potential discrimination against employees and customers of whom businesses don’t approve. 

The cases, known as Sebelius v. Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. v. Sebelius, stem from Hobby Lobby and Conestoga Wood’s objections to sections of the Affordable Care Act, which require new health plans to pay for some kinds of contraception and fertility treatments. Both Hobby Lobby and Conestoga are run by religious conservatives who object to the new federal health care requirements for small businesses. Hobby Lobby is owned and operated by David Green, who ranks on Forbes’ list of wealthiest people in the world, with a net worth of $5 billion. 

Among the central questions the justices will rule on: To what degree does the Religious Freedom Restoration Act (RFRA) of 1993 apply to for-profit corporations? The act allows for individual exemptions from federal laws based on religion where the government is unable to prove a compelling interest, or where laws impose a substantial burden on an individual. The law, signed with overwhelming majorities by both the House and Senate, has been the subject of legal debate ever since.

The cases cut even deeper, as they ultimately involve a corporation’s ability to interfere with the First Amendment guarantee of a separation between church and state in public life. Both Hobby Lobby and Conestoga argue that their companies are the equivalent of people, relieving them of some federal obligations as organizations, where many different kinds of people work together. Hobby Lobby, for example, employs 23,000 people in nearly 600 stores throughout the U.S.

In many respects, legal experts say, the Hobby Lobby suit is like the controversial Citizens United v. Federal Election Commission case, where conservative justices ruled that companies are like individuals, in the sense that they may raise unlimited amounts of money in furtherance of specific political agendas. 

In a blog post about the upcoming ruling, Charley Moore, CEO of online legal services site Rocket Lawyer, had this to say:

If the Court rules in favor of Hobby Lobby and/or Conestoga, it could have significant consequences for employees and shareholders alike. The Obama Administration warns such a ruling could be wielded as “a sword used to deny employees of for-profit commercial enterprises the benefits and protections of generally applicable laws.”

Unless it finds a way out, the Roberts Court will slide further down the slippery slope created by Citizens United. Should the justices continue application of the Bill of Rights to the legally fictitious “persons” that are incorporated entities, where will it end?

A Hint of What’s to Come

In March, during 90 minutes of heated debate, the justices revealed the deep ideological divide that will underpin their ultimate decision:

“The whole point of RFRA is that Congress wanted to provide exceptions for the religious views of particular–including proprietors, individuals,” Chief Justice Roberts said in response to Donald B. Verrilli, Solicitor General of the United States. In his appeal to the High Court, below, he cited the laws which allow First Amendment religious freedom rights and workplace laws to coexist:

The touchstone for resolving this case is the principle Justice Jackson articulated in Prince v. Massachusetts. As he said, “Limitations which of necessity bound religious freedom begin to operate whenever activities begin to affect or collide with the liberties of others or of the public. Adherence to that principle is what makes possible the harmonious functioning of a society like ours, in which people of every faith live and work side by side.”

And in a now-famous exchange with Hobby Lobby’s chief lawyer, Paul Clement, Justice Sonia Sotomayor asked pointedly about how far the special treatment Hobby Lobby is seeking would extend:

Is your claim limited to sensitive materials like contraceptives or does it include items like blood transfusion, vaccines? For some religions, products made of pork? Is any claim under your theory that has a religious basis, could an employer preclude the use of those items as well?

Legal and civil rights experts fear that a win for Hobby Lobby and Conestoga could make it easier for businesses to claim a legal right to discriminate, for example against employees and customers of whose lifestyles they may disapprove on biblical grounds. That could include unwed mothers, people with different religious views, or people in same-sex marriages. 

“Justice Kennedy might have grave concerns about the effect of Hobby Lobby’s reasoning for anti-discrimination principles in other contexts, including whether corporations would attempt religious exemptions from laws recognizing equality for gays and lesbians,” Elizabeth Wydra, chief counsel for the Constitutional Accountability Center, told Inc. in an earlier interview.

Other Cases of Interest

Echoing the federal matter, a number of states this year have tried to pass laws that would grant businesses religious exemptions over whom they hire and the customers they serve. Such laws provoked a firestorm in Arizona, where an angered business community rallied to overturn legislation pushed through by conservative legislators. By contrast, the Mississippi Religious Freedom Restoration Act sailed through its local statehouse and was signed by the governor in April. It will go into effect starting July.

Hobby Lobby has recently been caught up in other court proceedings as well. In New York, it settled a false advertising case, agreeing to pay more than $200,000 to upstate schools near which it had advertised sales on items like school supplies for more than 52 consecutive weeks. Endless sales are a violation of state truth-in-advertising laws. 

Hobby Lobby’s chief executive has also recently gone on a bizarre self-promotion campaign, spending close to a billion dollars on a traveling museum that asserts biblical truth over secular truth.