Latest Seventh Circuit Decision on Birth Control Benefit Paves Another Path to SCOTUS

Just days before the Obama administration announced new rules concerning the birth control benefit, a split 7th Circuit Court of Appeals granted an injunction allowing another for-profit business to opt out, putting to rest any lingering doubts that the issue will eventually land before the Supreme Court.

The Grote Family owns and operates Grote Industries, a for-profit business located in Madison, Indiana. Grote manufactures vehicle safety and lighting systems. The business employs 1,148 workers over a variety of locations. It’s a privately-held business with a self-funded insurance plan. The Grote’s are Catholic and claim to operate their business according to the “precepts of their faith.” This includes adhering to the Catholic Church’s teachings regarding “the moral wrongfulness of abortifacient drugs, contraception, and sterilization” and denying their employees contraception coverage in the company’s plan. When faced with complying with the birth control benefit the Grotes sued to block the mandate and enjoin the Obama administration from enforcing its penalty provisions. The district court denied their request, but in a 2-1 decision the Seventh Circuit Court of Appeals reversed the district court pending appeal, which means for now, the Grotes do not have to comply.

What’s noteworthy about the decision in this case is not the outcome, but the detailed and well-reasoned dissent crafted by Circuit Judge Ilana Rovner. In examining the question of what it means for the Grotes to run a for-profit business to run according to the precepts of their faith, Rovner first points out that the business itself has “stated no religious goals as part of its mission, it does not elect its employees, vendors, or customers on the basis of their religious beliefs, and it does not require its employees to conform their behavior to any particular religious precepts.” Because, Circuit Judge Rovner reasons, there is simply nothing from the perspective of the company that demonstrates any religious beliefs, let alone sincerely-held ones that belong to the company, it is impossible to imagine the company, as distinct from its owners the Grotes, has any religious interests or rights to assert at all.

Breaking down the distinction between the owners and the company even more, Circuit Judge Rovner states what should be obvious: the owners do not provide the contraception coverage, the company does. Even in self-funded health plans like the ones offered by Grote Industries, those premium payments come out of the company’s bank account and not the owners. The Grotes are simply not at liberty to “treat the company’s bank accounts as their own” unless they are also comfortable waiving the personal liability protections afforded to them under corporate law as well. The Grotes, Circuit Judge Rovner points out, are not in any way personally compelled to engage in any activity they disapprove of, they do not have to approve or endorse contraceptive use, and can even actively discourage the use of contraception by others.

If we accept the Grotes’ argument then we must also consider whether their religious interests are burdened anytime an employee uses his or her Grotes Industries paycheck, or money from a health-care reimbursement account, to pay for contraception outright. That’s because the Grotes’ argument ignores completely that health insurance is an element of employee compensation. How an employee independently chooses to use that insurance is then arguably no different, from the law’s perspective, from the ways in which that employee decides to spend her take-home pay and that analysis does not change regardless if a health plan is self-funded or not.

This argument will be at the heart of any case the Supreme Court chooses to review on the birth control mandate: to what extent does an individual get to use their individual religious belief as a shield from obeying the law. In almost any other context the courts have been unanimous in holding business can’t use religion as a shield like this. Landlords have had to rent housing to unmarried couples despite personal religious objections to co-habtitation for example. This was, until the political controversy surrounding Obamacare, considered well-settled law. Clearly conservatives believe they have a political opening with the birth control mandate, and a sympathetic Supreme Court, but it’s worth remembering they thought the same thing with Obamacare generally and ultimately lost.

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  • exdem

    You have to be careful in your argument that health insurance is a part of employee compensation and, therefore, employers have no right to not offer contraceptives in their health plans.  I am a woman who does not use artificial contraception.  Your argument means that I and others who choose not to use artificial contraception and single men who don’t need it, can argue that we don’t want contraception as a part of our compensation.  According to your argument, we have a right to not be compensated with contraception.  If your argument holds up in court, then individuals will be able to refuse coverage for contraception and the only people paying for this coverage will be those who use it, at least in theory driving up the cost for the coverage.  The HHS mandate is a lost cause.  It would be better to let it go.  You can’t have it both ways.

    • nsevast

      You can argue whatever you want about what forms of compensation you want. It will have no affect on labor laws or on company policy which are the things that actually determine how you are compensated for your work. I am rarely sick and would much rather have higher pay instead of paid sick leave. Too bad for me. The fact that I do not use my sick leave has no affect on my other forms of compensation or the compensation of my coworkers. Same with insurance benefits. The overall cost of insurance for the company may be affected by how much employees utilize the insurance (though probably only marginally and indirectly, as it will be averaged across the entire pool of the insured or across those in the relevant age groups in the relevant industry, not just those at a particular company), but your individual rate is not affected by if you use a given benefit or not.

      Of course, even if your argument had any merit, contraception coverage is expected to be approximately revenue neutral and potentially even a money saver for insurance companies in the long run. If it does turn out that way, you should be thankful your argument sucks and you will not have to pay for the privilege of not having contraception coverage or not using the coverage if you do still have it.

  • colleen

    Single men who are sexually active  do need effective contraception. I’m sorry you raise your sons to be sexually irresponsible. Perhaps if conservatives held their sons responsible for their sexual behaviors there would be fewer single mothers.

  • arekushieru

    Sorry, but the article isn’t about whether or not the company should provide funding for contraception.  It’s whether the owners should be able to identify themselves as the company, and, if so, rightly forfeit any benefits accrued from operating as a corporation.  Please read more carefully next time.


    As to the article, itself, the individual rights and freedoms of the owners should not dictate the individual rights and freedoms of its employees, anyways. 

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