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Judge: Closely Held Corporation is the Religious "Alter-Ego" of its Owners E-mail
Written by Don Byrd   
Monday, 19 November 2012

A federal judge has issued an injunction to stop the government from enforcing certain Affordable Care Act mandates on the Tyndale Publishing House. Tyndale is a major Bible publisher and objects on religious grounds to the requirement that it provide health insurance that includes contraception for its employees. Because Tyndale does not fall squarely within the definition of a religious organization like those exempt from the rule (Tyndale is a for-profit company), the challenge raises important questions about whether and when a company can have religious beliefs, and can exercise them. Should any company's employees be subject to the boss's beliefs when it comes to federal health laws?

The judge in this case provided an initial answer, holding that closely held companies are indeed an extension of the owner and thus can bring religious exercise lawsuits on his or her behalf.

This Court, like others before it, declines to address the unresolved question of whether for-profit corporations can exercise religion within the meaning of the RFRA and the Free Exercise Clause. Instead, the Court will assess whether Tyndale has standing to assert the free exercise rights of its owners....

Tyndale is a closely-held corporation owned by four entities united by their Christian faith, each of which plays a distinct role in achieving shared, religious objectives. Christian principles, prayer, and activities are pervasive at Tyndale, and the company’s ownership structure is designed to ensure that it never strays from its faith-oriented mission. The Court has no reason to doubt, moreover, that Tyndale’s religious objection to providing insurance coverage for certain contraceptives reflects the beliefs of Tyndale’s owners.
[W]hen the beliefs of a closely-held corporation and its owners are inseparable, the corporation should be deemed the alter-ego of its owners for religious purposes. In such circumstances, courts must “consider the rights of the owners as the basis for the [f]ree [e]xercise claim” brought by the corporation, even if the regulation technically applies only to the corporation.
The contraceptive coverage mandate places the plaintiffs in the untenable position of choosing either to violate their religious beliefs by providing coverage of the contraceptives at issue or to subject their business to the continual risk of the imposition of enormous penalties for its noncompliance. Such a threat to the very continued existence of the plaintiffs’ business necessarily places substantial pressure on the plaintiffs to violate their beliefs. Government action that creates such a Hobson's choice for the plaintiffs amply shows that the contraceptive coverage mandate substantially burdens the plaintiffs’ religious exercise.


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