Catholic Businessman Battles HHS Mandate
CEO Takes Stand for His Faith
BY Joan Frawley Desmond
March 23-April 5, 2014 Issue | Posted 3/18/14 at 4:59 PM
GRAND RAPIDS, Mich. — John Kennedy, a Michigan-based CEO of Autocam, a closely held automotive company, pinpoints his own spiritual turning point to an impromptu debate at a party on an unusual subject: Is the Eucharist really the body and blood of Jesus Christ?
"During the debate, I said, ‘Well, I don’t have a hard time believing it could be real, but why is that so relevant?’" Kennedy recalled.
"The next day, at Sunday Mass, there was a great homily on the Real Presence. I don’t think that was an accident," Kennedy told the Register.
That homily inspired the father of four to embark on a pilgrimage of faith that would guide his decision to file suit in October 2012, as one of the first of 47 for-profit plaintiffs to challenge the Health and Human Services’ contraception mandate in court.
On March 1, Kennedy celebrated the 26th anniversary of Autocam, and he says his Catholic faith has shaped the corporate culture of Autocam and a second company, Autocam Medical, from the generous pay and benefits for employees to a health-insurance plan that excluded coverage of contraception and sterilization.
But the way both companies do business may be under threat if President Obama gets his way.
The Obama administration has sought to dismiss the merits of HHS lawsuits filed by business owners like Kennedy, arguing that free exercise and statutory religious-freedom protections only apply to individuals, not "corporations."
Further, while Kennedy and other HHS for-profit plaintiffs have gone to court to obtain a reprieve, Planned Parenthood has attacked the lawsuits as a threat to women’s reproductive rights. "The bosses want to deny your birth-control coverage," announced one story on the Planned Parenthood’s website that has sparked editorials and commentary echoing its claim.
But Kennedy contends that his faith is integral to Autocam’s corporate culture and that the country actually needs more business leaders inspired by strong ethical and moral values and guided by Catholic social teaching that affirms the fundamental dignity and rights of every worker.
"I went into this with some trepidation, knowing how it was going to be painted," he acknowledged.
"But I am more convinced now that we have absolutely done the right thing by standing up for religious freedom."
"Yeah, I would rather be celebrated; we all would. But my conscience has been formed to know what is right and wrong: Would God want us to be using our money to pay for something he has taught us is an intrinsic evil?"
Thus far, appellate courts have been divided on the specific question of whether the federal Religious Freedom Restoration Act (RFRA) applies to for-profit business owners or their corporations.
RFRA directs the government to pass laws that do not burden religious freedom without a compelling state interest. When that threshold has been met, the state must choose the least burdensome means of advancing that interest.
In December 2012, the 6th Circuit Court of Appeals rejected both Autocam’s RFRA claims and those of the Kennedys as individual owners of the corporations. Subsequently, the U.S. Supreme Court denied their petition for relief.
But on March 25, the high court will hear oral arguments for another for-profit legal challenge to the HHS mandate brought by Hobby Lobby, a large craft-store chain run by the Oklahoma-based Green family, who are Christians.
The high court is expected to issue a ruling on Hobby Lobby and a related lawsuit brought by Conestoga Wood by late June, and that will likely decide the fate of other lawsuits, including Autocam’s.
"It is our expectation that if Hobby Lobby prevails, we will too," said Tom Brejcha, the president and chief counsel of the Thomas More Society, a Chicago-based public interest group that joined with Catholic Vote Legal Defense Fund and a Michigan law firm to petition the Supreme Court to review and reverse the 6th Circuit’s decision.
Brejcha also told the Register that the Kennedys "are complying under protest" with the mandate. To do otherwise would trigger massive financial penalties.
Kennedy was just 29 when his company first opened its doors, and over the past 26 years Autocam and Autocam Medical have grown along with his deepening faith. There are now about 680 U.S. employees, and he has expanded abroad to Europe and China.
Kennedy describes himself in earlier years as a "cultural Catholic" who got to Mass every Sunday but had failed to "mature" in his faith.
That changed with the homily on the Eucharist. And he said his personal and business decisions have also been influenced by his parish, which has a robust social-justice ministry and encourages local Catholics to reach out to the "underserved."
The strong faith of his daughter, Margaret, a co-plaintiff in the legal challenge, has also been an inspiration for Autocam’s CEO. The recent graduate of the University of Notre Dame often joins her father for media interviews and isn’t shy about speaking out on this and other issues important to Catholics.
"People are so passionate about issues related to ‘choice’ and reproduction," noted Margaret Kennedy. "Meanwhile, the choices that you have to make that are in line with the Catholic Church — not to be sexually active on a college campus — also aren’t easy."
Margaret Kennedy said that when answering questions about her father’s opposition to the HHS mandate from fellow students, she often presented the lawsuit as just one part of his much broader ethical engagement as a business owner — ethical engagement that often seems to be lacking from the contemporary business world.
Making Business Ethical
In the wake of the 2008 financial crisis, public respect for "the 1%" has remained at a low point. While the newly released film The Wolf of Wall Street portrays the moral corruption of its protagonist, political campaigns have also targeted successful Americans amid claims that they have reaped their wealth at the expense of the middle class.
At the same time, some CEOs are lauded for enlightened company policies, like CVS removing tobacco products from its shelves; but others, like the business owners who filed HHS legal challenges, face skepticism and even hostility.
"We want businesses to act with a high level of integrity, but we are not being consistent," John Kennedy suggested.
Kennedy says that Autocam’s generous wages — "high-school kids are paid $9 an hour" — and good benefits have allowed him to retain many longtime employees.
He is proud that Autocam has won recognition for its health plan, which offers incentives to help employees give up smoking or lose weight. The program has kept health-related costs "flat for the past seven years."
"What we said is, ‘Look, we will provide the opportunity for everyone to get health benefits for free.’ Now, 91% of employees pay no premium and are taking advantage of the health-care credits," he said.
That means Autocam’s "average employee spends $1,700 for health care, and we provide $1,500 of that."
However, until Kennedy was forced to comply with the mandate, Autocam’s self-insured plan had not covered contraception or sterilization for more than a decade. For now, Kennedy’s failure to secure an exemption to the HHS mandate has forced him to provide all the "preventive services" mandated by the controversial federal law. But the court rulings have not silenced his protests.
"There is all this talk about the need for businesses to be more ethical, yet the government believes I should park my religious and ethical values at the door of my business," he charged.
This Catholic CEO contends that the government is trying to advance a "different view of how business owners should operate that has little to do with their own religious or ethical beliefs.
"Instead, government [believes it] should tell us what is right and wrong. They set regulations … and then we don’t need any morality from the people" who actually lead and work in the business.
By contrast, Kennedy believes that government regulations, no matter how well-intentioned, are no substitute for the well-formed individual conscience.
"What we really need is people bringing a very strong morality — a Judeo-Christian value system — to the workplace every day. We would all be better businesses if we lived those values more perfectly."
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