As anticipated, the U.S. Supreme Court appeared sympathetic with Catholic Charities of Wisconsin March 31 in its case against the state of Wisconsin that could have national repercussions for other faith-based nonprofits.
In oral hearings for Catholic Charities Bureau v. Wisconsin Labor and Industry Review Commission, justices from both left and right appeared to agree that the state had discriminated against the Catholic ministry by refusing to grant an exemption from the state’s unemployment tax. That exemption is available to other religious groups, but the state determined most of Catholic Charities’ work is secular, not religious.
Determining what organizations should be classified as secular or religious, and what organizations should be classified as “churches,” has been a repeated focus of modern debate. In the most extreme cases, faith-based advocacy groups have sought and been given “church” status by the IRS, meaning they don’t have to report their financials publicly.
This case involves a more practical matter of whether Catholic Charities of Wisconsin has to pay into the state’s unemployment tax fund. Wisconsin, like most states, provides an exemption to churches, religious schools and some religious groups. That also means their employees, if terminated, are not eligible for unemployment pay.
At its core, this case is about treating groups equally, argued Justice Elena Kagan.
At its core, this case is about treating groups equally, argued Justice Elena Kagan, one of three more liberal justices on the nine-member court. It is “pretty fundamental that we don’t treat some religions better than others,” she said. “And we certainly don’t do it based on the content of the religious doctrine that those religions preach.”
Much of the discussion in court was about what kind of test might be appropriate to determine what is a religious organization and what is a secular organization.
Eric Rassbach, representing Catholic Charities, told the court the Wisconsin Supreme Court had improperly interpreted the unemployment tax exemption “to favor what it called ‘typical’ religious activity.”
The court “held that helping the poor can’t be religious, because secular people help the poor too,” he argued.
In Wisconsin, the designation hinges on defining groups “operated primarily for religious purposes.”
The Ethics and Religious Liberty Commission of the Southern Baptist Convention joined other religious denominations in an amicus brief urging the court to rule in favor of Catholic Charities. That coalition included the General Conference of Seventh-day Adventists, the United States Conference of Catholic Bishops and others.
“It is not right for the government to prescribe religious practice or compel a religious group to conform to its standards of what qualifies as ‘real’ religion,” ERLC Vice President Miles Mullin told Baptist Press. “In fact, the state has no right to impose penalties for religious opinions of any kind. The state of Wisconsin is doing just that in its determination that the mercy ministry of the Catholic Diocese of Superior did not meet its standards for ‘real’ religious activity and thus disqualified them for a tax exemption.”
On the other hand, Americans United for Separation of Church and State and seven religious and civil-rights organizations filed an amicus brief supporting the state’s position.
“This case is part of a dangerous trend: Christian nationalist legal groups want employers who claim a religious motive to be able to sidestep worker protection requirements without demonstrating anything more,” said AU President Rachel Laser. “The employer might work in a secular business, operate in a secular way, receive government funding, and hire people of all religions and none, but still be exempt from important safeguards on religious grounds. If the Christian nationalists succeed, the mere invocation of religious beliefs would be allowed to erase important social safety nets and worker and civil rights protections.”
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