The Supreme Court鈥檚 could affect companies and workers far beyond Hobby Lobby and the other plaintiffs.
But nobody seems to know how far.
The ruling applies to 鈥渃losely held for-profit corporations,鈥� a small subset of employers, Justice Samuel A. Alito Jr. wrote for the majority. But in a dissenting opinion, Justice Ruth Bader Ginsburg suggests the impact will be far broader.
鈥淎lthough the court attempts to cabin its language to closely held corporations, its logic extends to corporations of any size, public or private,鈥� she said.
鈥淐losely held鈥� commonly refers to a company owned by a few insider shareholders, rather than publicly traded giants such as IBM or Bank of America.
(Photo by Mark Wilson/Getty Images)
But government statisticians don鈥檛 keep track of companies that way.
鈥淚鈥檝e never seen data on how many closely held businesses there are out there,鈥� says Paul Fronstin, a senior researcher with the Employee Benefit Research Institute.
Nor is it clear that the court鈥檚 idea of closely held is the same as other definitions. For tax purposes, a company is closely held when five or fewer shareholders control at least half the stock 鈥� as long as it鈥檚 not a law firm, architectural shop or other professional practice.
But the court, which makes no reference to the IRS regulation, seems to understand closely held another way.
The decision applies to 鈥渃orporations like Conestoga, Hobby Lobby and Mardel,鈥� the companies involved in the case, Alito wrote.
What do those companies have in common? They are 鈥渃losely held corporations, each owned and controlled by members of a single family,鈥� he said.
The case hinged on whether regulation of corporations can impinge on the religious convictions of their owners. For retailer Hobby Lobby and the other plaintiffs, Alito argued, the company and the owners are virtually the same.
At Conestoga, a maker of cabinet components, the Hahn family exercises 鈥渟ole ownership of the closely held business; they control its board of directors and hold all of its voting shares,鈥� he wrote. 鈥淥ne of the Hahn sons serves as the president and CEO. The Hahns believe that they are required to run their business 鈥榠n accordance with their religious beliefs and moral principles.鈥欌��
Such one-family companies are a narrow slice of the IRS鈥� definition of closely held. At many companies the tax agency considers closely held, not all shareholders are related.
Even Walmart, the retailing giant with publicly traded stock, seems to fit the IRS definition of closely held. A few Walton family members own more than half the shares.聽
And closely held companies without public shares can also 鈥渂e very big entities,鈥� such as Mars Inc., the family owned candy maker with 70,000 employees, said Marcia D. Greenberger, co-president of the National Women鈥檚 Law Center. 鈥淪o there鈥檚 a question about how broad the reach of the Hobby Lobby decision is.鈥�
That will ultimately depend on how many employers decline to offer contraception based on the ruling and whether courts allow it.
鈥淲e鈥檒l have to see how broadly other corporations try to jump on the bandwagon to say, 鈥楳e too; we don鈥檛 want to provide this either,鈥欌�� said Greenberger. 鈥淚t opens the door for many, many lawyers to be providing all kinds of advice.鈥�
KHN Senior Correspondent Julie Rovner contributed.聽