Two Court Decisions Set to Shape US Commerce

600px-Supreme_Court_Front_DuskIt has been a big week for businesses, workers, government, unions and the First Amendment. The US Supreme Court handed down two 5-4 decisions that will certainly affect commerce in the years to come.

The most widely anticipated decision was the Hobby Lobby case. The Hobby Lobby chain of craft stores is a closely held corporation. On religious grounds, its owners objected to the Affordable Care Act’s mandate that requires providing contraception services.

Decision applies narrowly

While the Supreme Court decision didn’t let all corporations off the hook, if the corporation is run by a small group of individuals, those employers can claim a religious exception. In practical terms, they will now be treated like nonprofit religious organizations, which have already been able to opt out of the contraceptive mandate.

Less direct government control over the day-to-day operations of small businesses is a good thing and this decision seems to go in that direction. We’ll have to see how it plays out in practical terms.

Unions take a hit

The Supremes also dealt a blow to unions. In the perpetual standoff between business and unions, this seems like a win for business, but only in the most general sense. The decision centered around public sector employees and did not cover private sector employees.

Home health care workers who have opted out of union membership cannot be required to pay the union a fee to cover collective bargaining activities. If they disagree with positions taken by the union, requiring payment would violate their right to free speech, the Supreme Court ruled.

This could lead to a significant drain on union coffers and membership. The only real increase of union membership in recent decades has been among public sector employees. Weakening the public sector union base, would generally weaken the US union movement overall. While US business didn’t have a dog directly in this fight, I suppose¬†most leaders ¬†are cheering the decision.

White knuckle outcomes

And while each of these decisions will shape the future of commerce, perhaps even more significant is the fact that both were 5-4 decisions. That’s the US legal system’s equivalent of a World Cup soccer match going to a penalty kick shootout. Winners come out knowing that they narrowly escaped defeat and losers have a hard time accepting the decision.

I sure like those 9-0 Supreme Court decisions and I wouldn’t object to the US team winning one down in Brazil by a score of 3-0.

Both events seem quite rare nowadays, especially when the stakes are high.

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