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The United States Supreme Court recently announced a unanimous decision in favor of Catholic Charities Bureau, Inc. (Catholic Charities), the social services arm of the Roman Catholic Diocese of Superior, Wisconsin. The decision reiterates key First Amendment liberties for religious organizations. It also drives home the importance of governing documents and policies anchored in, and reflecting, a ministry’s unique Christian identity.
The Wisconsin Labor and Industry Review Commission denied an unemployment tax exemption to Catholic Charities and four of its sub-entities. Similar to federal law, Wisconsin exempts from unemployment tax an organization that meets two criteria: it must be “operated primarily for religious purposes” and controlled, supervised, or principally supported by a church. The Diocese of Superior unquestionably supervises and controls Catholic Charities. But the state agency determined that Catholic Charities was not “operated primarily for religious purposes.” Catholic Charities appealed. The issue eventually landed before the Wisconsin Supreme Court.
Shockingly, the state’s high court sided against Catholic Charities. Despite religious motivations for its work and the Diocese’s control and supervision, the court held that Catholic Charities is not operated for primarily religious purposes. According to the Wisconsin Supreme Court, religious motivations are not enough to receive an unemployment tax exemption under the statute. An entity’s specific activities, however motivated, must also be religious. Activities with a religious purpose then include worship services, religious outreach, ceremonies, or religious education. But Catholic Charities does not require recipients of charitable aid to be Catholic. And it does not “imbue program participants with the Catholic faith nor supply any religious materials to program participants…” In the eyes of the Wisconsin Supreme Court, this lack of direct evangelization rendered Catholic Charities’ activities “secular in nature” and disqualified the ministry for the unemployment tax exemption.
But the Wisconsin Supreme Court’s reasoning creates a dilemma for Catholic Charities. Catholic teaching requires the faithful to provide charitable services to all persons regardless of religious belief. And, according to Catholic Charities, Church teaching forbids using works of charity to “proselytize.” Catholic Charities thus does not require recipients of charitable aid to be Catholic nor incorporate religious education into its distribution of that aid. Ironically, the Court’s decision required Catholic Charities to contradict Catholic teaching to satisfy the state’s religious purposes test.
Represented by the Becket Fund, Catholic Charities appealed again, this time to the United States Supreme Court. It argued Wisconsin violated the First Amendment in its interpretation of the statute. Alliance Defending Freedom also filed two amicus briefs in support of Catholic Charities — one at the petition stage and one on the merits.
The United States Supreme Court unanimously ruled 9-0 in favor of Catholic Charities. Recognizing that the First Amendment to the U.S. Constitution demands neutrality among religions, the Supreme Court held that the state’s interpretation unconstitutionally penalized Catholic Charities for following the beliefs and practices favored by its own religious denomination.
Justice Sotomayor authored the opinion and stated Catholic Charities made a “theological choice” when it decided to abstain from sharing religious education materials during the provision of its charitable services. The Court saw the ministry’s decisions as a unique manifestation of a particular religious tradition: the Catholic Church does not require recipients of charitable aid to be Catholic or receive religious instruction. Other religious traditions might make different choices, based on distinct theological convictions or practices, but Catholic Charities could not be penalized for its own theological decisions.
Justice Jackson and Justice Thomas wrote separate concurring opinions. Justice Thomas’ analysis is particularly worth noting. In his opinion, Wisconsin should have ended its inquiry at the level of the Diocese of Superior, Catholic Charities’ parent organization. Justice Thomas said Catholic Charities remains an expression of the diocese that controls it, functioning as “simply an arm” of the same body. In his view, church autonomy principles required Wisconsin to respect this matter of internal governance and inquire no further: Catholic Charities shares the religious purposes of the diocese that controls it.
Ultimately, the Supreme Court reversed and remanded the decision of the Wisconsin Supreme Court. This result sends a strong signal to states on proper application of key First Amendment principles under the Religion Clauses.
This decision underscores the importance of churches and ministries stewarding governing documents and policies well. Christian organizations should carefully cultivate and articulate their Christian identity throughout. From the articles of incorporation and bylaws to the employee handbook and code of conduct, Christian organizations should display their religious identity with clarity and conviction. They should likewise articulate the theological convictions and discernment underlying different ministry decisions. The Supreme Court has shown a preference for respecting a ministry’s adherence to established religious beliefs and practices, and therefore a ministry will be best served legally if it can clearly articulate a link between its day-to-day actions and its core governing beliefs.
The Supreme Court’s decision in Catholic Charities reminds us that clearly articulating your religious identity — in both belief and practice — can make all the difference.
That’s where the Church & Ministry Alliance comes in. Every membership begins with a Religious Liberty Assessment: a legal review of your bylaws, statement of faith, and other key documents. Our attorneys look for gaps that could weaken your ministry’s religious liberty protections and provide practical steps to strengthen them.
If it’s been a while since you’ve looked at your documents, now’s a good time to start.
Click here to learn more about membership.
The United States Supreme Court unanimously ruled 9-0 in favor of Catholic Charities.
