145 S.Ct. 1583
U.S.2025Background
- Wisconsin law exempts certain religious organizations from unemployment compensation taxes if they are “operated primarily for religious purposes” and controlled by a church.
- Catholic Charities Bureau, Inc., and its affiliated subentities, all overseen by the Roman Catholic Diocese of Superior, applied for this exemption.
- The Bureau’s religious mission involves charitable services to all, without proselytizing or restricting services to Catholics, in accordance with Catholic doctrine.
- The Wisconsin Supreme Court denied the exemption, interpreting the law to require proselytization or restricting services to co-religionists for the exemption to apply.
- Catholic Charities challenged the decision, arguing the court’s interpretation violated the First Amendment’s mandate of religious neutrality.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether conditioning the exemption on proselytization/co-religionist service violates the First Amendment | The law’s application creates unconstitutional denominational preference by favoring certain religious doctrines/practices | The criteria are justified as secular distinctions to avoid invidious discrimination, not denominational preference | Required neutrality; law, as interpreted, impermissibly distinguishes between religions and fails strict scrutiny |
| Whether strict scrutiny applies to this religious classification | Law is not based on secular criteria and so must face strict scrutiny under the Establishment Clause | Only applies if invidious discrimination is shown; Gillette precedent does not require strict scrutiny for neutral accommodations | Strict scrutiny applies to overt denominational distinguishing based on inherently religious choices |
| Whether the state’s interests justify the restriction under strict scrutiny | The state’s interest in unemployment coverage and avoiding church-state entanglement is not furthered by the challenged line-drawing | The exemption is narrowly tailored to compelling interests of providing coverage and minimizing entanglement | State has not shown narrow tailoring; law is over- and underinclusive, and interests do not justify discrimination |
| Whether the structure and incorporation of Catholic Charities affects its eligibility | Church autonomy requires deference to religious institutions’ self-definition, not state corporate forms | The corporate structure, not church governance, controls the exemption’s applicability | Court must defer to church’s internal definition; incorporation alone does not break eligibility |
Key Cases Cited
- United States v. Detroit Timber & Lumber Co., 200 U.S. 321 (explained syllabus is not part of the opinion)
- Larson v. Valente, 456 U.S. 228 (establishes strict scrutiny applies to laws preferring some religions over others)
- Gillette v. United States, 401 U.S. 437 (conscientious objector status available to all faiths; distinguished in this opinion)
- Watson v. Jones, 13 Wall. 679 (courts must avoid theological disputes in religious matters)
- Kedroff v. St. Nicholas Cathedral, 344 U.S. 94 (church autonomy doctrine on religious governance)
- Serbian E. Orthodox Diocese v. Milivojevich, 426 U.S. 696 (civil courts must defer to church decisions on internal matters)
- Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, 565 U.S. 171 (ministerial exception and church autonomy)
- Our Lady of Guadalupe School v. Morrissey-Berru, 591 U.S. 732 (church autonomy in employment decisions)
- Reed v. Town of Gilbert, 576 U.S. 155 (tailoring required for speech restrictions under strict scrutiny)
- Santa Fe Indep. Sch. Dist. v. Doe, 530 U.S. 290 (government favoritism in religion conveys outsider status)
- Epperson v. Arkansas, 393 U.S. 97 (government may not aid or oppose particular religions)
- Zorach v. Clauson, 343 U.S. 306 (state not to interfere in sectarian competition)