The Seventh Circuit has issued a preliminary injunction in Korte v. Sebelius, brought by K&L Contractors, and its owners Cyril and Jane Korte, based on the Religious Freedom Restoration Act. A majority found that the challenge was likely to succeed on its merits, and that the plaintiffs faced irreparable harm. From the opinion:
[K&L] is a family-run business, and [the Kortes] manage the company in accordance with their religious beliefs. This includes the health plan that the company sponsors and funds for the benefit of its nonunion workforce. That the Kortes operate their business in the corporate form is not dispositive of their claim. See generally Citizens United v. Fed. Election Comm’n, 130 S. Ct. 876 (2010). The contraception mandate applies to K&L Contractors as an employer of more than 50 employees, and the Kortes would have to violate their religious beliefs to operate their company in compliance with it.
Workplace Prof Blog suggests that Citizens United could also support the contrary result:
For example, if the funds of dissenting shareholders can be used for political speech without violating the First Amendment, then why can’t the Kortes’ funds be used for K&L’s contraception coverage without violating their RFRA rights? The Seventh Circuit doesn’t answer this question, though it seems its answer would have to turn on whether or not the shareholders in question were in the majority—a result that seems both counterintuitive and at odds with the Supreme Court’s approach to dissenters’ rights in other context, including the union dues context. And, as Matt Bodie has pointed out, employees and managers got no consideration at all in Citizens United, even though their work helps employers generate the funds that they go on to spend on political speech.