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Indiana’s ‘religious freedom restoration’ law is far broader than RFRA

March 26th, 2015  |  Joy Waltemath

By Joy P. Waltemath, J.D.

Today, Indiana Governor Mike Pence signed a “religious freedom” bill in a private ceremony. Senate Bill 101 is modeled on the Religious Freedom Restoration Act, a federal law passed in 1993 but inapplicable to the states due to a U.S. Supreme Court decision in 1997. Consequently, a number of states have passed their own “RFRA”-type laws to apply to state and local governments; Indiana is the 20th state to have enacted legislation.

Modeled on federal law? Specifically, the new state law bars a governmental entity from substantially burdening a person’s exercise of religion, even when the burden results from a rule of general applicability, unless the governmental entity demonstrates that the burden as applied to the person is:

  • in furtherance of a compelling governmental interest; and
  • the least restrictive means of furthering that compelling governmental interest.

Indiana’s newly enacted law will apply to all governmental entity statutes, ordinances, resolutions, executive or administrative orders, regulations, customs, and usages, including their implementation or application—regardless of whether they were enacted, adopted, or initiated before, on, or after the law’s effective date of July 1, 2015.

The governor’s view. In a statement released by the Indiana governor’s office, Pence noted that he signed the bill “because I support the freedom of religion for every Hoosier of every faith. The Constitution of the United States and the Indiana Constitution both provide strong recognition of the freedom of religion but today, many people of faith feel their religious liberty is under attack by government action.”

Pence referenced the federal law in his statement, noting that the Religious Freedom Restoration Act limited “government action that would infringe upon religion to only those that did not substantially burden free exercise of religion absent a compelling state interest and in the least restrictive means.”

“Last year the Supreme Court of the United States upheld religious liberty in the Hobby Lobby case based on the federal Religious Freedom Restoration Act,” Pence said, “but that act does not apply to individual states or local government action. At present, nineteen states—including our neighbors in Illinois and Kentucky—have adopted Religious Freedom Restoration statutes. Indiana joined that group “in order to ensure that religious liberty is fully protected under Indiana law,” he continued.

Pence’s statement says that “This bill is not about discrimination, and if I thought it legalized discrimination in any way in Indiana, I would have vetoed it. In fact, it does not even apply to disputes between private parties unless government action is involved. For more than twenty years, the federal Religious Freedom Restoration Act has never undermined our nation’s anti-discrimination laws, and it will not in Indiana.”

Far broader than federal law? However, Jeffrey I. Pasek, the immediate past chair of the Cozen O’Connor’s Labor & Employment Group, whose avocation involves the role of religion in public life, commented to Employment Law Daily that “This bill goes far beyond the federal RFRA in two ways. First, it allows individuals to claim exemptions from neutral government mandates even in cases in which the government is not involved.”

S.B. 101 provides that a person whose exercise of religion has been substantially burdened, or is likely to be substantially burdened through a violation of the new law, may assert that violation or impending violation as a claim or defense in a judicial or administrative proceeding—even where the state or any other governmental entity is not a party to the proceeding. However, where a relevant governmental entity is not a party to the proceeding, it nonetheless would have an unconditional right to intervene in order to respond to the person’s invocation of the new law.

“It would fall to the individual who is being discriminated against to attempt to justify an otherwise neutral law by asserting that the government has a compelling interest in enforcing the law, but nothing in this bill says the government has to get involved in those cases,” explained Pasek. “At least if someone outright challenges a governmental requirement against government enforcement, we can expect the government to make a reasoned decision about whether to support its requirement and to apply that rationale on an even-handed basis. That is totally lacking here.”

Further, Pasek noted that “Without support of the government, how can any individual job applicant, wedding cake purchaser, or would-be apartment renter be able to uphold the government’s interest? How will such a person be able to compile and present evidence of an actual government interest and not just a theoretical interest? Also, how can a would-be plaintiff in one of these cases establish a less burdensome alternative when the government is the one that would have to choose that alternative and has not been asked for its opinion? In short, this bill goes way beyond the RFRA because it leaves religious objectors in a position where they are much less likely to be challenged and much more likely to prevail.”

Broader than Hobby Lobby. Likely in response to the U.S. Supreme Court’s decision last year in Burwell v. Hobby Lobby, referenced by Governor Pence in his statement, the new law also applies to a very broadly defined category of “person,” which includes: (1) an individual; (2) an organization, a religious society, a church, a body of communicants, or a group organized and operated primarily for religious purposes; and (3) a partnership, a limited liability company, a corporation, a company, a firm, a society, a joint-stock company, an unincorporated association, or another entity that may sue and be sued, and exercises practices that are compelled or limited by a system of religious belief held by an individual or the individuals who have control and substantial ownership of the entity, regardless of whether the entity is organized and operated for profit or nonprofit purposes.

Hobby Lobby involved a privately held company where there were no dissenting shareholders,” noted Pasek. “What do we do if a large public company like Wal-Mart wants to invoke religion to avoid a state imposed mandate that health insurance policies cover blood transfusions? Do the officers decide the religious views of the company, or must the board of directors or shareholders vote on it? Nothing like this exists under federal law because the Supreme Court has not extended Hobby Lobby to such a situation. The opinion suggests the Hobby Lobby decision would not extend that far, but this is only dictum, and we don’t know where the line will eventually be drawn.”

Impact on religious minorities. “The Indiana bill jumps right into the fire on this issue by giving every company religious rights regardless of its size. But,” Pasek asked, “how about protecting the religious rights of the minority shareholders? They have religious rights as shareholders, and this bill says that majority rules. What is the compelling government interest for not protecting them? Won’t there be many cases in which some less restrictive means exists beside straight-out majority vote by which the religious rights of the corporation can be protected? Individuals can change their religious views at any time. Presumably companies can too. Do we get a new vote on religious beliefs every time there are new shareholders?

Pasek predicted, for these reasons, that the Indiana legislation could “lead to significant litigation, expose government to substantial costs and force government officials to become dragged in to numerous disputes that they would rather avoid.”

He also added a note of caution concerning the law: “It will also curtail the civil liberties, employment rights, and contract rights of individuals whose only sin is that they do not follow the same religious views as their employer, their landlord, their baker, or some other third party.”