2020 IL App (1st) 181768
Ill. App. Ct.2020Background
- By The Hand Club for Kids is a separately incorporated nonprofit afterschool program founded by a Moody Church member to provide free tutoring, meals, and spiritual instruction to underserved Chicago youth.
- Program features: five sites (two church-based), daily chapel/Bible study, prayer at meals, Christian music, Bibles given to students (with parent consent), and staff required to be Christian and sign a statement of faith.
- Organizational ties: articles/bylaws declare religious purpose, a doctrinal statement is included in bylaws, Moody Church board of elders approves key corporate acts, and Moody Church provides governance oversight and some funding; the program is a 501(c)(3) charity funded largely by donors and foundations.
- Procedural posture: former HR director Wimberly filed for unemployment; IDES’s ALJ and Board denied By The Hand’s claim of exemption under 820 ILCS 405/211.3(A)(2) (organization operated primarily for religious purposes); the circuit court reversed the Board; IDES appealed.
- Legal context: exemption statutes are strictly construed; claimant bears the burden to show exemption; the court reviewed the Board’s mixed question of law and fact under the clearly erroneous standard.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether By The Hand is "operated primarily for religious purposes" under 820 ILCS 405/211.3(A)(2) | Program is religion-centered: bylaws/doctrine, daily chapel/Bible study, pervasive prayer, staff must be Christian, governance by Moody Church, and metrics include spiritual outcomes (conversions/church attendance). | Program’s daily operations are mainly secular (meals, homework help, literacy instruction); public funding and teacher referrals; religious activity is secondary; St. Augustine’s parallels. | Court held By The Hand operates primarily for religious purposes and is exempt; Wimberly ineligible for benefits. |
| Whether the Board’s decision was clearly erroneous (standard of review) | Board ignored controlling parochial-school precedent (Unity Christian) and mischaracterized pervasive religious elements. | Board’s factual finding was supported by evidence and deserves deference. | Court applied mixed-question review and concluded the Board’s decision was clearly erroneous. |
| Role of precedent (St. Augustine’s, parochial-school cases, property-tax cases) | Parochial-school line (Unity Christian, Community Lutheran, Nampa) shows entities that integrate faith into education are primarily religious; property-tax and cemetery cases are distinguishable. | St. Augustine’s and certain tax/cemetery cases show similar organizations may be primarily secular. | Court distinguished St. Augustine’s and property-tax/cemetery cases and relied on parochial-school authorities to find religious primacy. |
Key Cases Cited
- Unity Christian School v. Rowell, 6 N.E.3d 543 (Ill. App. 2014) (parochial-school facts supported finding the school operated primarily for religious purposes)
- St. Augustine’s Center for American Indians, Inc. v. Department of Labor, 449 N.E.2d 246 (Ill. App. 1983) (organization whose main functions were secular social services held not primarily religious)
- Community Lutheran School v. Iowa Dep’t of Job Service, 326 N.W.2d 286 (Iowa 1982) (Iowa Supreme Court found separately incorporated Lutheran schools operated primarily for religious purposes)
- Nampa Christian Schools Foundation, Inc. v. State, 719 P.2d 1178 (Idaho 1986) (Christian school’s pervasive religious integration supported exemption)
- Lemon v. Kurtzman, 403 U.S. 602 (U.S. 1971) (Supreme Court recognition that church-related schools are often religion-pervasive)
- AFM Messenger Service, Inc. v. Department of Employment Security, 763 N.E.2d 272 (Ill. 2001) (standard for reviewing mixed questions of fact and law in administrative appeals)
- Scripture Press Foundation v. Annunzio, 111 N.E.2d 519 (Ill. 1953) (exemptions construed narrowly; burden on claimant to show exemption)