By Ben Domenech - November 21, 2012

Hobby Lobby, the mega craft store, has lost the first round of their case against the government over the contraception mandate, and will be fined $1.3 million per day starting January 1st if they do not pay for contraception, sterilization, and abortifacients through employee provided insurance. As a “secular” corporation, they have no rights to use the religious beliefs of their ownership as a justification not to abide by the contraception mandate. This decision is inconsistent with the Tyndale House one you may have heard about. So apparently being a Bible publisher does make you religious, but being a Bible seller doesn’t.

The argument the administration advanced successfully in the Hobby Lobby case is a particularly troublesome one for believers of all faiths who operate under the assumption that they can use their moral principles to guide the way their place of business spends money. According to the administration's legal arguments, the family that owns Hobby Lobby is not protected by the First Amendment's "free exercise" clause because “Hobby Lobby is a for-profit, secular employer, and a secular entity by definition does not exercise religion.”

If Hobby Lobby ultimately loses this case, it's not hard to see which decision they'll make given the choice between a $1.3 million per day fine and a $2 million per month fine. The latter, of course, is the amount they estimate they'll pay for simply dropping insurance altogether and shifting all employees onto Medicaid and the subsidized exchange coverage.

Think it’ll be a hard decision? Maybe understanding who these people are would give you some clarity.

The Hobby Lobby folks are a straight-up American success story. A family business, started in Oklahoma in 1970 with a $600 bank loan, they started by making their frames from wood bought from local sellers, building them in their garage. The kids glued them together on the kitchen table in exchange for baseball cards. The family opened their first frame retail shop in Oklahoma City in 1972. They had four employees. Now they have 514 stores in 41 states. They employ 13,240 people full time. In 1981 they added another store to the family, Mardel, a Christian/church supply shop which sells Bibles and study books, curriculum, Christian craft supplies. That's another 35 stores, in 7 states, with 372 employees. So they went from a garage business started with $600 to two businesses that employ more than 13,600 people full time across basically the entire country.

The company remained all privately owned, with no franchising. Their statement of purposes and various commitments all begin with Bible verses, commitments to honor the Lord. The Hobby Lobby folks pay well above minimum wage and have increased salaries four years in a row despite the recession. They are teetotalers of the old Oral Roberts variety, refusing to stock shot glasses, don't sell any of their store locations with liquor stores, don't allow backhauling of beer shipments – all things that could make them money, but they just bear the costs. Every Christmas and Easter, the Hobby Lobby folks advertise a free Bible and spiritual counseling. They are closed every Sunday. The family also signed the giving pledge, committing to donate the majority of their wealth to philanthropy.

So: I doubt this is the type of company to spend one dime on this contraception mandate. They will just drop coverage, and pay employees the difference, shifting them onto the exchanges or the taxpayer, rather than compromise their beliefs. It’s logical, it’s more predictable as a budgeting choice, and it will save them tens of millions in the long run versus retaining coverage and paying the fine.

The case isn’t over, of course – there will be an appeal, and I wouldn’t be surprised to see this end up at the Supreme Court. There’s also a bipartisan effort to expand the religious exemption, though that’s more targeted at individuals than companies. It may be that the next major court decision regarding Obamacare will deal with how religious freedom rights apply to corporations - a Hobby Lobby case which follows with, or breaks from, the lessons of Citizens United could have enormous ramifications for religious business owners across the country. Americans will find out soon whether freedom of association matters or doesn’t under the Obama health insurance regime.