Food Company Wins Religious Exemption from Contraception Benefit

By Andrew Zajac | August 11, 2014

Fresh Unlimited Inc. won’t have to provide contraceptive coverage for its employees under the Obama administration’s healthcare reform law, in what may be the first exemption granted since a June U.S. Supreme Court ruling.

The parent of Freshway Foods on Friday won an appeals court ruling that qualifies it for the same treatment the high court approved in its June 30 Hobby Lobby decision allowing family-run businesses to claim a religious exemption from the requirement to include contraceptives in their health insurance plans.

The suit by Francis and Philip Gilardi, who own Sidney, Ohio-based Freshway, is one of about 50 filed by for-profit businesses over religious objections to the Patient Protection and Affordable Care Act of 2010’s birth-control coverage mandate. The Gilardis are Roman Catholic and said that complying with the U.S. Department of Health and Human Services mandate would require them to violate deeply held religious beliefs.

U.S. District Judge Emmet Sullivan in Washington in March 2013 ruled against the Gilardis, saying that he couldn’t allow a corporation to assert the religious beliefs of individuals. The U.S. Court of Appeals reversed part of Sullivan’s decision, and the ruling was put on hold pending the Supreme Court’s resolution of the Hobby Lobby case.

In addition to carving a hole in the law, the Hobby Lobby ruling marked an expansion of corporate rights, allowing companies, like people, to claim religious freedom under federal law.

“To my knowledge, the D.C. Circuit is the first court of appeals to apply Hobby Lobby in a remanded HHS mandate case,” said Adele Keim, an attorney with the Becket Fund for Religious Liberty, a Washington-based, nonprofit religion advocacy group which represented Hobby Lobby in its legal challenge.

Today’s order sends the Freshway case back to Sullivan with instructions to issue an order granting an exemption and to consider whether to extend it to the Gilardis.

The case is Gilardi v. HHS, 13-cv-00104, U.S. District Court, District of Columbia (Washington).