In Catholic Charities Bureau, Inc. v. State of Wisconsin Labor and Industry Review Commission, (WI Sup. Ct., March 14, 2024), the Wisconsin Supreme Court by a vote of 4-3 held that Catholic Charities Bureau and four of its sub-entities are not entitled to an exemption from the state's unemployment compensation law. The statute exempts nonprofit organizations "operated primarily for religious purposes and operated, supervised, controlled, or principally supported by a church or convention or association of churches." The court concluded that under the statute, what is important is the purpose of the nonprofit organization, not the purpose of the church which controls it. The court said in part:
... [I]n determining whether an organization is "operated primarily for religious purposes" within the meaning of Wis. Stat. § 108.02(15)(h)2., we must examine both the motivations and the activities of the organization....
CCB and the sub-entities profess to have a religious motivation.... However, accepting an organization's motivations does not end the inquiry as we must also examine its activities....
Here, such criteria weigh in favor of a determination that CCB's and the sub-entities' activities are not "primarily" religious in nature. The record demonstrates that CCB and the sub-entities, which are organized as separate corporations apart from the church itself, neither attempt to imbue program participants with the Catholic faith nor supply any religious materials to program participants or employees. Although not required, these would be strong indications that the activities are primarily religious in nature....
CCB's and the sub-entities' activities are primarily charitable and secular. The sub-entities provide services to individuals with developmental and mental health disabilities. These activities include job training, placement, and coaching, as well as services related to activities of daily living. CCB provides background support and management services for these activities——a wholly secular endeavor....
Such services can be provided by organizations of either religious or secular motivations, and the services provided would not differ in any sense....
The court also concluded that neither this inquiry nor the required payment of unemployment tax violates the Free Exercise or Establishment Clauses.
Justice Bradley, joined in part by Chief Justice Ziegler, filed a lengthy dissenting opinion, saying in part:
Impermissibly entangling the government in church doctrine, the majority astonishingly declares Catholic Charities are not "operated primarily for religious purposes" because their activities are not "religious in nature."... The statute, however, requires only that a nonprofit be operated primarily for a religious reason.
Justice Hagedorn also filed a brief dissenting opinion.
AP reports on the decision, as does Courthouse News Service,
