Catholic Charities Bureau, Inc. v. Wisconsin Labor and Industry Review Comm'n.Catholic Charities Bureau, Inc. v. Wisconsin Labor and Industry Review Comm'n.
(Slip Opinion)
OCTOBER TERM, 2024
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience
SUPREME COURT OF THE UNITED STATES
Syllabus
CATHOLIC CHARITIES BUREAU, INC., ET AL. v. WISCONSIN LABOR AND INDUSTRY REVIEW COMMISSION ET AL.
CERTIORARI TO THE SUPREME COURT OF WISCONSIN
No. 24-154. Argued March 31, 2025—Decided June 5, 2025
Wisconsin law exempts certain religious organizations from paying unemployment compensation taxes. The relevant 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.”
Held: The Wisconsin Supreme Court‘s application of
(a) The First Amendment mandates government neutrality between religions and subjects any state-sponsored denominational preference to strict scrutiny. The Wisconsin Supreme Court‘s interpretation of
(b) The State argues that, when it comes to religious accommodations afforded by the government, courts should ask whether the accommodation‘s eligibility criteria are the product of “invidious discrimination” to determine if strict scrutiny applies. In support of that rule, the State draws on Gillette v. United States, 401 U. S. 437. Gillette, however, is inapposite. Unlike the conscientious objector status in Gillette, which was equally available to members of all religions, the Wisconsin Supreme Court‘s interpretation of
(c) Section
2024 WI 13, 411 Wis. 2d 1, 3 N. W. 3d 666, reversed and remanded.
SOTOMAYOR, J., delivered the opinion for a unanimous Court. THOMAS, J., and JACKSON, J., filed concurring opinions.
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, pio@supremecourt.gov, of any typographical or other formal errors.
SUPREME COURT OF THE UNITED STATES
No. 24-154
CATHOLIC CHARITIES BUREAU, INC., ET AL., PETITIONERS v. WISCONSIN LABOR & INDUSTRY REVIEW COMMISSION, ET AL.
ON WRIT OF CERTIORARI TO THE SUPREME COURT OF WISCONSIN
[June 5, 2025]
JUSTICE SOTOMAYOR delivered the opinion of the Court.
Wisconsin, like many other States, exempts certain religious organizations from paying taxes into the State‘s unemployment compensation system. One such exemption covers nonprofits “operated primarily for religious purposes” and controlled, supervised, or principally supported by a church.
The question here is whether
I
A
Wisconsin has long operated an unemployment compensation program that seeks to mitigate and “more fairly” distribute the “economic burdens resulting from unemployment.”
Wisconsin‘s regime contains an exemption for religious employers. See
Wisconsin is not alone in exempting religious organizations from unemployment compensation taxes. The Federal Unemployment Tax Act,
B
Catholic Charities Bureau, Inc., (Bureau), is a nonprofit organization that serves as the social ministry arm of the Roman Catholic Diocese of Superior, Wisconsin. 2024 WI 13, ¶4, 411 Wis. 2d 1, 13, 3 N. W. 3d 666, 672. The Bureau‘s stated mission is to “carry on the redeeming work of our Lord.” App. to Pet. for Cert. 382a. In aid of that mission, the Bureau “provid[es] services to the poor and disadvantaged” and seeks to “be an effective sign of the charity of Christ.” Id., at 383a. It does not distinguish on the basis of “race, sex, or religion in reference to clients served, staff employed and board members appointed.” Ibid.
The Bureau oversees several separately incorporated entities, including four that, together with the Bureau, are the petitioners here: Barron County Development Services, Inc., Black River Industries, Inc., Diversified Services, Inc., and Headwaters, Inc. 411 Wis. 2d, at 14–16, 3 N. W. 3d, at 672-673. These entities provide a range of charitable services to local communities across Wisconsin. Barron County Development Services, for instance, helps individuals with disabilities secure employment. See id., at 14, 3 N. W. 3d, at 673. Black River Industries provides daily living services to Wisconsinites with developmental or mental health disabilities, among other charitable services. Id., at 15, 3 N. W. 3d, at 673.
The Roman Catholic Diocese of Superior exercises control over both the Bureau and its subentities. Id., at 14, 3 N. W. 3d, at 672. The bishop of the Diocese serves as the Bureau‘s president and appoints its membership, which in turn oversees the Bureau “to ensure” that it fulfills its mission “in compliance with the Principles of Catholic social teaching.” Ibid. The Bureau‘s executive director, who need not be a Catholic priest, supervises the operations of each subentity. Id., at 16, 3 N. W. 3d, at 673; see also 2023 WI App 12, ¶11, 406 Wis. 2d 586, 596, 987 N. W. 2d 778, 783.
Employees of the Bureau and its subentities are not required to ascribe to any particular religious faith, and the same is true for the recipients of their charitable services. 411 Wis. 2d, at 16, 3 N. W. 3d, at 673; see also App. to Pet. for Cert. 383a. Participants in petitioners’ charitable programs do not receive religious training or orientation, and neither the Bureau nor its subentities “tr[ies] to ‘inculcate‘” participants with the Catholic faith. 411 Wis. 2d, at 16, 3 N. W. 3d, at 673. That rule, petitioners explain, reflects religious doctrine prohibiting Catholic bodies from “misus[ing]
C
In 2016, petitioners sought from the Wisconsin Department of Workforce Development a determination that they qualified for the religious-employer exemption set forth in
In the years that followed, petitioners received a series of alternating wins and losses as the parties appealed up through the state administrative and judicial systems. The Wisconsin Labor and Industry Review Commission reversed the ALJ‘s decision and reinstated the department‘s denials of petitioners’ exemption requests. See App. to Pet. for Cert. 212a-290a. After petitioners sought judicial review in state court, the state trial court overrode the commission, holding that petitioners are entitled to the exemption. See id., at 190a. The State Court of Appeals, however, subsequently reversed. 406 Wis. 2d 586, 987 N. W. 2d 778. It reasoned that petitioners are not “operated primarily for religious purposes” because petitioners’ “provision of charitable social services . . . are neither inherently or primarily religious activities.” Id., at 627, 629, 987 N. W. 2d, at 798, 799.
The Wisconsin Supreme Court affirmed. The court began by recognizing, as the lower courts had, that petitioners are “without question ‘operated, supervised, controlled, or principally supported’ by the Diocese of Superior.” 411 Wis. 2d, at 22, 3 N. W. 3d, at 676 (quoting
Applying that standard, the court held that petitioners’ activities are “secular in nature,” not religious. 411 Wis. 2d, at 38, 3 N. W. 3d, at 684. Petitioners “neither attempt to imbue program participants with the Catholic faith nor supply any religious materials to program participants or employees,”
The court then addressed petitioners’ argument that its interpretation of
Justice Rebecca Grassl Bradley authored a dissent, which Chief Justice Ziegler joined and Justice Hagedorn joined in part. Justice Bradley would have held that a nonprofit is “operated primarily for religious purposes,”
See id., at 108–110, 3 N. W. 3d, at 718-719. Justice Hagedorn dissented separately, noting his agreement with Justice Bradley‘s construction of the statute. Id., at 122, 3 N. W. 3d, at 725.
We granted certiorari to decide whether the Wisconsin Supreme Court‘s interpretation of
II
A
“The clearest command of the Establishment Clause” is that the government may not “officially prefe[r]” one religious denomination over another. Larson v. Valente, 456 U. S. 228, 244 (1982). This principle of denominational neutrality bars States from passing laws that “‘aid or oppose‘” particular religions, Epperson v. Arkansas, 393 U. S. 97, 106 (1968), or interfere in the “competition between sects,” Zorach v. Clauson, 343 U. S. 306, 314 (1952). The Establishment Clause‘s “prohibition of denominational preferences is inextricably connected with the continuing vitality of the Free Exercise Clause,” too. Larson, 456 U. S., at 245. That is because the “fullest realization of true religious liberty requires that government” refrain from “favoritism among sects.” Id., at 246 (quoting School Dist. of Abington Township v. Schempp, 374 U. S. 203, 305 (1963) (Goldberg, J., concurring)). Government actions that favor certain religions, the Court has warned, convey to members of other faiths that “they are outsiders, not full members of the political community.” Santa Fe Independent School Dist. v. Doe, 530 U. S. 290, 309 (2000).
To guard against that serious harm, this Court in Larson v. Valente, 456 U. S. 228, set a demanding standard for the government to justify differential treatment across religions on denominational lines. See id., at 244-246. When a state law establishes a denominational preference, courts must “treat the law as suspect” and apply “strict scrutiny in adjudging its constitutionality.” Id., at 246. The government bears the burden to show that the relevant law, or application thereof, is “closely fitted to further a compelling governmental interest.” Id., at 251 (internal quotation marks omitted).
A law that differentiates between religions along theological lines is textbook denominational discrimination. Take, for instance, a law that treats “a religious service of Jehovah‘s Witnesses . . . differently than a religious service of other sects” because the former is “less ritualistic, more unorthodox, [and] less formal.” Fowler v. Rhode Island, 345 U. S. 67, 69 (1953). Or consider an exemption that applies only to religious organizations that perform baptisms, engage in monotheistic worship, or hold services on Sunday. Such laws establish a preference for certain religions based on the content of their religious doctrine, namely, how they worship, hold services, or initiate members and whether they engage in those practices at all. Such official differentiation on theological lines is fundamentally foreign to our constitutional order, for “[t]he law knows no heresy, and is committed to the support of no dogma.” Watson v. Jones, 13 Wall. 679, 728 (1872).
This case involves that paradigmatic form of denominational discrimination. In determining whether petitioners qualified for the tax exemption under
Petitioners’ Catholic faith, however, bars them from satisfying those criteria. Catholic teaching, petitioners say, forbids “misus[ing] works of charity for purposes of proselytism.” Brief for Petitioners 10 (quoting Directory for the Pastoral Ministry of Bishops “Apostolorum Successores” ¶196). It also requires provision of charitable services “without making distinctions by race, sex, or religion.” Brief for Petitioners 7 (quoting App. to Pet. for Cert. 431a). Many religions apparently impose similar rules prohibiting proselytization or religious differentiation in the provision of charitable services. See Brief for Religious Liberty Scholars as Amici Curiae 12–13 (discussing beliefs in Judaism, Islam, Sikhism, and Hinduism). Others seemingly have adopted a contrary approach. See id., at 12 (discussing practices of some Protestant denominations).
Wisconsin‘s exemption, as interpreted by its Supreme Court, thus grants a denominational preference by explicitly differentiating between religions based on theological practices. Indeed, petitioners’ eligibility for the exemption ultimately turns on inherently religious choices (namely, whether to proselytize or serve only co-religionists), not “secular criteria” that “happen to have a ‘disparate impact’ upon different religious organizations.” Larson, 456 U. S., at 247, n. 23. Much like a law exempting only those religious organizations that perform baptisms or worship on Sundays, an exemption that requires proselytization or exclusive service of co-religionists establishes a preference for certain religions based on the commands of their religious doctrine.
In short, as applied to petitioners by the Wisconsin Supreme Court,
B
The State does not dispute that the government may not prefer one religion over another. See Brief for Respondents 35. Instead, the State argues that, when it comes to “religious accommodations” afforded by the government, courts should ask whether the accommodation‘s eligibility criteria are the product of “invidious discrimination” to determine if strict scrutiny applies. Id., at 35, 37; see id., at 42-43. This Court‘s decision in Gillette v. United States, 401 U. S. 437 (1971), the State contends, lends support to this rule. See Brief for Respondents 36. As the State would have it, Gillette stands for the premise that whenever a religious “accommodation‘s line serves ‘considerations of a pragmatic nature’ having ‘nothing to do with a design to foster or favor any sect, religion, or cluster of religions,’ the Establishment Clause is not offended.” Brief for Respondents 36 (quoting Gillette, 401 U. S., at 452-453).
The inquiry set forth in Gillette, however, is inapposite. There, this Court rejected an Establishment Clause challenge to a
The same is not true here. The Wisconsin Supreme Court‘s interpretation of
Next, the State disputes the premise that petitioners were denied coverage “because they do not proselytize or serve only Catholics” in the course of performing charitable work. Brief for Respondents 37. The State insists that, instead, the Wisconsin Supreme Court excluded petitioners because they had “identified no distinctively religious activity that would create difficulty in resolving unemployment disputes.” Ibid. When pressed at argument as to what would qualify as such “distinctively religious activity” in the context of providing charitable services, however, the State clarified that it meant “activities that express and inculcate religious doctrine: worship, proselytization, religious education.” Tr. of Oral Arg. 81; see also id., at 84 (“What it comes down to is whether the employees of the organization are expressing and inculcating religious doctrine“).
That understanding of the Wisconsin Supreme Court‘s ruling, even if assumed correct, cannot save the statute from strict scrutiny. Decisions about whether to “express and inculcate religious doctrine” through worship, proselytization, or religious education when performing charitable work are, again, fundamentally theological choices driven by the content of different religious doctrines. Id., at 81. A statute that excludes religious organizations from an accommodation on such grounds facially favors some denominations over others.
III
Because
Wisconsin justifies its law by reference to two principal interests. First, it argues that the law serves a compelling state interest in “ensuring unemployment coverage for its citizens.” Brief for Respondents 44. Yet the State fails to explain how the theological lines drawn by
The distinctions drawn by Wisconsin‘s regime, moreover, are vastly underinclusive when it comes to ensuring unemployment coverage for its citizens. Wisconsin exempts over 40 forms of “employment” from its unemployment compensation program. See
Second, the State argues that the Wisconsin Supreme Court‘s interpretation of
That overinclusiveness pervades Wisconsin‘s exemption regime more broadly, too. Recall that Wisconsin exempts from its unemployment compensation system all “church[es] or convention[s] or association[s] of churches” without differentiating between employees actually involved in religious works, for whom the anti-entanglement concern is relevant, and other staff.
*
*
*
It is fundamental to our constitutional order that the government maintain “neutrality between religion and religion.” Epperson, 393 U. S., at 104. There may be hard calls to make in policing that rule, but this is not one. When the government distinguishes among religions based on theological differences in their provision of services, it imposes a denominational preference that must satisfy the highest level of judicial scrutiny. Because Wisconsin has transgressed that principle without the tailoring necessary to
It is so ordered.
THOMAS, J., concurring
SUPREME COURT OF THE UNITED STATES
No. 24-154
CATHOLIC CHARITIES BUREAU, INC., ET AL., PETITIONERS v. WISCONSIN LABOR & INDUSTRY REVIEW COMMISSION, ET AL.
ON WRIT OF CERTIORARI TO THE SUPREME COURT OF WISCONSIN
[June 5, 2025]
JUSTICE THOMAS, concurring.
A nonprofit organization is entitled to an exemption from Wisconsin‘s unemployment-insurance tax on employers if it is controlled by a church and “operated primarily for religious purposes.”
The First Amendment‘s guarantee of church autonomy gives religious institutions the right to define their internal governance structures without state interference. Religious institutions may create different corporate entities to help manage their temporal affairs, but those entities do not define the broader religious institution‘s internal structure. Here, although Catholic Charities and its subentities are separately incorporated from the Diocese of Superior, they are, as a matter of church law, simply an arm of the Diocese.
I
The First Amendment guarantees to religious institutions broad autonomy to conduct their internal affairs and govern themselves. This guarantee, which we have called the “church autonomy doctrine,” provides that a religious institution is not defined by the corporate entities it chooses to form.
A
The Religion Clauses of the First Amendment proscribe laws “respecting an establishment of religion, or prohibiting the free exercise thereof.” Among other protections, these Clauses guarantee the “right to organize voluntary religious associations,” Watson v. Jones, 13 Wall. 679, 728 (1872), and to allow these associations to “decide for themselves, free from state interference, matters of church government as well as those of faith and doctrine,” Kedroff v. Saint Nicholas Cathedral of Russian Orthodox Church in North America, 344 U. S. 94, 116 (1952).1 For instance,
THOMAS, J., concurring
The Religion Clauses’ special protection for the autonomy of religious institutions derives from at least three sources.
First is the right of association. This Court has “long understood as implicit in the right to engage in activities protected by the First Amendment a corresponding right to associate with others.” Roberts v. United States Jaycees, 468 U.S. 609, 622 (1984). As with other voluntary associations, those “who unite themselves to [a religious] body do so with an implied consent to” its internal system of “government, and are bound to submit to it.” Watson, 13 Wall., at 729. And, since “the text of the First Amendment . . . gives special solicitude to the rights of religious organizations,” they must enjoy a greater right to control their own affairs than that enjoyed by other groups. Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, 565 U.S. 171, 189 (2012).
Second is the reality that matters of religious “faith and doctrine” are “closely linked to matters of church government.” Our Lady, 591 U.S., at 746 (internal quotation marks omitted). Who serves as a church‘s minister, for instance, determines whether the “preaching, teaching, and counseling” a congregation receives conforms to the faith that it professes. Id., at 747. And, the polity of a religious institution is often itself a matter of faith. In the Catholic Church, for instance, the leadership of the Pope over the Church is essential, because it is an article of faith that Jesus Christ personally established the office of Pope. See First Vatican Council, Pastor Aeternus, chs. 1-2 (1870) (citing Matthew 16:16-19), in 2 Decrees of the Ecumenical Councils 811, 812-813 (N. Tanner ed. 1990) (Tanner). The free exercise rights of individuals thus cannot be adequately protected unless the autonomy of religious institutions is also protected.
Third is the understanding that church and state are “two rightful authorities,” each supreme in its own sphere. M. McConnell, The Origins and Historical Understanding of Free Exercise of Religion, 103 Harv. L. Rev. 1409, 1496-1497 (1990) (McConnell). This concept has deep roots in the history of Western civilization. Jesus famously said to render “unto Caesar the things which are Caesar‘s; and unto God the things that are God‘s.” Matthew 22:21. From antiquity onward, many Christians have interpreted this statement to mean that church and state are distinct, and that each has a legitimate claim to authority within its sphere. See Huntsman v. Corporation of President of Church of Jesus Christ of Latter-day Saints, 127 F. 4th 784, 803-804 (CA9 2025) (en banc) (Bumatay, J., concurring); R. Renaud & L. Weinberger, Spheres of Sovereignty: Church Autonomy Doctrine and the Theological Heritage of the Separation of Church and State, 35 N. Ky. L. Rev. 67, 68-84 (2008)
The First Amendment was adopted “against this background” of distinct spheres for secular and religious authorities. Hosanna-Tabor, 565 U.S., at 183. In arguing for religious freedom for Baptists, for example, James Madison appealed to the notion of “independent” “spiritual and earthly authorities.” McConnell 1497. According to Madison, man‘s “duty towards the Creator . . . is precedent, both in order of time and in degree of obligation, to the claims of Civil Society.” Memorial and Remonstrance Against Religious Assessments (1785), in 8 Papers of James Madison 295, 299 (R. Rutland, W. Rachal, B. Ripel, & F. Teute eds. 1973). Thus, “Religion is wholly exempt from [Civil Society‘s] cognizance.” Ibid. In a similar vein, early American decisions justified protections for church autonomy in part based on the need to respect religious institutions’ legitimate and distinct sphere of authority. See, e.g., Watson, 13 Wall., at 733 (holding that “the civil courts exercise no jurisdiction” over matters of “ecclesiastical government” because doing so “would deprive [religious] bodies of the right of construing their own church laws“); Chase v. Cheney, 58 Ill. 509, 538 (1871) (“‘Causes spiritual must be judged by judges of the spirituality, and causes temporal by temporal judges‘“); Harmon v. Dreher, 17 S.C. Eq. 87, 120 (1843) (“It belongs not to the civil power to enter into or review the proceedings of a Spiritual Court“); see also K. Funk, Church Corporations and the Conflict of Laws in Antebellum America, 32 J. Law & Religion 263, 281 (2017) (Funk) (observing that 19th century decisions developing the church autonomy doctrine “essentially treated these church tribunals as competent foreign courts“).
B
The church autonomy doctrine has important ramifications for the incorporation of religious institutions. Establishing corporate entities is essential for religious institutions to manage their temporal affairs. But, the doctrine forbids treating religious institutions as nothing more than the corporate entities that they form.
1
Religious institutions do not exist apart from the secular world. They need to buy and sell property. They need to hire and pay staff. They need to form contracts and file lawsuits. They need their property arrangements to persist when personnel changes, and they need their property to remain secure when individual members of the institution become insolvent. These and other considerations make the formation of corporate entities essential for many religious institutions.
At the same time, the church autonomy doctrine forbids treating religious institutions as nothing more than the corporate entities they have formed. A corporation is a “mere creature of law” that generally “possesses only those properties which the charter of its creation confers upon it.” Trustees of Dartmouth College v. Woodward, 4 Wheat. 518, 636 (1819); see also Kamen v. Kemper Financial Services, Inc., 500 U.S. 90, 98-99 (1991) (“Corporations . . . are creatures of state law, and it is state law which is the
Instead, courts and commentators have long recognized that “while a legal entity may represent the church or other body of believers, the entity alone is not the church; it is only a part of the entire religious organization.” 1 W. Bassett, W. Durham, R. Smith, & M. Goldfeder, Religious Organizations and the Law §8:2, p. 8-7 (2022). “The entity is merely used by the organization rather than being identical to the organization itself.” Ibid. A religious corporation thus possesses a “dual personality“: It is at once a corporation defined by state law and a part of a broader, “unincorporated” religious institution. Id., at 8-6 to 8-7; accord, Classis of Central Cal. v. Miraloma Community Church, 177 Cal. App. 4th 750, 763, 99 Cal. Rptr. 3d 449, 459 (2009); Crissman v. Board of Trustees of Cathedral of Tomorrow of Akron, Inc., 1990 WL 31796, *2 (Ohio Ct. App., Mar. 21, 1990); Folwell v. Bernard, 477 So. 2d 1060, 1063 (Fla. Dist. Ct. App. 1985); Trinity Presbyterian Church of Montgomery v. Tankersley, 374 So. 2d 861, 866 (Ala. 1979); Willis v. Davis, 323 S.W. 2d 847, 848 (Ky. 1959); Wheelock v. First Presbyterian Church, 119 Cal. 477, 483, 51 P. 841, 843-844 (1897).
For instance, in Watson, the “nominal title-holders and custodians of the church property” at issue were “a body corporate” created by an “act of the Kentucky legislature.” 13 Wall., at 720. That corporation, this Court recognized, was not itself the church, but merely an entity “under the control of the church session,” an ecclesiastical “governing body . . . composed of the ruling elders and pastor.” Ibid. Thus, “the constitution, usages, and laws of the Presbyterian [Church],” not Kentucky corporate law, controlled the outcome of the dispute. Ibid.
2
We have recognized that the original “understanding” of the Religion Clauses’ protection of church autonomy is “reflected” in early postratification practice. Hosanna-Tabor, 565 U.S., at 184-185; see also Marsh v. Chambers, 463 U.S. 783, 787-790 (1983) (looking to early federal and state practice to determine the scope of the Establishment Clause). Here, that history confirms that religious institutions are more than the corporate entities that they form—and that conflating the two undermines the First Amendment rights of religious institutions.
Before Independence, corporate law provided the civil government with a mechanism to interfere in ecclesiastical affairs. Religious institutions had a particularly acute need to incorporate during that period, because “an unincorporated association could not hold property in its own right.” P. Kauper & S. Ellis, Religious Corporations and the Law, 71 Mich. L. Rev. 1499, 1505 (1973). But, incorporating was not easy. In most Colonies, a religious group had to petition the government for a
Following the Revolution, New York took a different path, enacting a statute to allow churches to incorporate without a special charter.
The 1784 Act authorized members of a church to elect trustees who, upon registering with a court, would become a body corporate able to hold property, exist perpetually, and sue in court. Id., at 614-615. But, although this body could be “intrusted with the management, care and disposition of the temporalities of [the] church,” the Act made clear that the corporate body was not the church itself. Id., at 618. The Act did not purport to name the trustees the leaders of the church, but took for granted that each church would be headed by a “minister.” Id., at 614. And, the Act specifically warranted that its provisions did not “in the least . . . alter or change the religious constitutions or governments” of any “churches.” Id., at 618.
The 1784 Act soon became a model for the Nation at large. With a handful of exceptions, analogous statutes were “adopted in every American state during the antebellum era.” Funk 268, and n. 20 (collecting statutes). This Court approved this trend, holding that it neither established religion nor restrained free exercise for a legislature to “enact laws more effectually to enable all sects to accomplish the great objects of religion by giving them corporate rights for the management of their property.” Terrett v. Taylor, 9 Cranch 43, 48-49 (1815). Thus, like New York and the States following its approach, this Court too framed incorporation as a way to empower religious institutions, not to define them or alter their polity.
In contrast, when Congress in 1811 attempted to use the corporate form to define a church‘s internal form of government, President James Madison raised a decisive constitutional objection. “Congress had passed a bill incorporating the Protestant Episcopal Church in the town of Alexandria in what was then the District of Columbia.” Hosanna-Tabor, 565 U.S., at 184. President Madison vetoed the bill, finding that it violated the First Amendment because it did not respect “the essential distinction between civil and religious functions.” 22 Annals of Cong. 982-983 (1811). Madison further explained:
“The bill enacts into, and establishes by law, sundry rules and proceedings relative purely to the organization and polity of the church incorporated, and comprehending even the election and removal of the Minister of the same; so that no change could be made therein by the particular society, or by the general church of which it is a member, and whose authority it recognises.” Id., at 983.
See also Hosanna-Tabor, 565 U.S., at 184-185 (recounting this episode and citing it as an early invocation of the church autonomy doctrine).
II
As a matter of church law, Catholic Charities and its subentities are an arm of the Diocese of Superior, and thus, for religious purposes, are not distinct organizations. But, when determining whether Catholic Charities was a religious organization entitled to a tax exemption, the Wisconsin Supreme Court nevertheless relied on Catholic Charities’ separate corporate charter to treat it as an entity entirely distinct and separate from the Diocese. That holding contravened the church autonomy doctrine.
A
The Catholic Church is a single worldwide religious institution. The Church is headed by the Pope. Code of Canon Law, Canon 331 (Latin-English ed. 1998). Catholics believe that the Pope is the successor of St. Peter, the Apostle chosen by Jesus to lead the Church. Ibid.; supra, at 4. The Church is divided into dioceses. A diocese generally consists of “all the faithful living” within “a definite territory,” who together constitute “a particular church” within the universal church. Code of Canon Law, Canons 369, 372, §1. Each diocese is “entrusted to a bishop for him to shepherd.” Canon 369. The bishop exercises “legislative, executive, and judicial power” over his diocese. Canon 391, §1.
This structure of the Church is a matter of faith, not mere administrative convenience. Catholics believe that in naming the Apostles, Jesus personally established the office of bishop and willed that “the bishops . . . should be shepherds in his church right to the end of the world.” Second Vatican Council, Lumen Gentium §18 (1964) (citing John 20:21), in 2 Tanner 849, 863; see Code of Canon Law, Canon 375, §1 (“Bishops . . . by divine institution succeed to the place of the Apostles through the Holy Spirit who has been given to them“).
The Church understands itself to have a “three-fold” religious mission: “proclaiming the word of God,” “celebrating the sacraments,” and “exercising the ministry of charity.” Pope Benedict XVI, Deus Caritas Est ¶25(a) (2005). “These duties presuppose each other and are inseparable.” Ibid. “The Church” therefore “cannot neglect the service of charity“—that is, care “for widows and orphans, prisoners, and the sick and needy of every kind“—“any more than she can neglect the Sacraments and the Word.” Id., ¶22.
In keeping with the Church‘s hierarchical structure, “the Bishops” have “primary responsibility for carrying out . . . the service of charity” at the local level. Pope Benedict XVI, On the Service of Charity, Introduction (2012) (internal quotation marks omitted). In particular, bishops are bound under canon law to establish within their territories organizations to carry out charitable works in the name of the Church subject to their supervision and control. Brief for Catholic Charities USA as Amicus Curiae 18; see generally On the Service of Charity. “In the United States, these organizations are known as Catholic Charities.” Brief for Catholic Charities USA as Amicus Curiae 15. The works of these organizations are considered acts of the Church itself. Deus Caritas Est ¶29.
The Diocese of Superior covers the northwest corner of Wisconsin. Catholic
Catholic Charities is organized under state law as a nonprofit corporation governed by three members. The first member is the Bishop, who serves as the organization‘s president. The second member is the Diocese‘s vicar general, who is the vice president. Under canon law, the vicar general is a priest chosen by the bishop to “assist him in the governance of the whole diocese.” Code of Canon Law, Canons 475, §1, 478, §1. The third member is the organization‘s executive director, who need not be a priest. The bishop appoints both the vicar general and the executive director, who serve at his pleasure. This structure gives the Bishop control over both Catholic Charities and its separately incorporated subentities, up to and including the power to dissolve them at will. See App. 193.
B
The Wisconsin Supreme Court disregarded this structure of Catholic Charities and its subentities in adjudicating the case below. The court acknowledged Catholic Charities’ status as an “arm” of the Diocese of Superior subject to the bishop‘s “control.” 2024 WI 13, ¶¶7, 9, 411 Wis. 2d 1, 13-14, 3 N. W. 3d 666, 672. It nonetheless viewed Catholic Charities and its subentities as distinct, nonreligious organizations merely because they are separately incorporated.
Wisconsin imposes a tax on employers to cover the cost of state-provided unemployment benefits.
In construing the scope of the exemption, the court began with “the threshold question of whose purposes we must examine in our analysis—those of the Diocese or those of [Catholic Charities] and its sub-entities.” 411 Wis. 2d, at 23, 3 N. W. 3d, at 676. The court treated this question as one of ordinary statutory interpretation, determining that the “plain language” of the statute required looking to the individual corporate entity‘s purpose, not the purpose of the church that operates or controls it. Ibid., 3 N. W. 3d, at 676-677.
Catholic Charities objected that examining “itself and its sub-entities as corporations separate from” the Diocese violates the First Amendment‘s guarantee of church autonomy by “‘divid[ing] up religious bodies according to secular principles.‘” Id., at 49, 3 N. W. 3d, at 689 (alteration in original). The Wisconsin Supreme Court disagreed. It acknowledged that, under the First Amendment, matters of ecclesiastical governance “belong to the church alone.” Id., at 50, 3 N. W. 3d, at 690. But, it insisted that the exemption simply “defines what employment is for purposes of unemployment insurance without reference to any religious principles or any
The Wisconsin Supreme Court‘s resolution of this threshold question was outcome determinative. The court recognized that the Diocese‘s “purpose is religious by nature.” 411 Wis. 2d, at 24, 3 N. W. 3d, at 677. In contrast, the court found that Catholic Charities’ and its subentities’ purposes “are primarily charitable and secular.” Id., at 35, 3 N. W. 3d, at 683; see ante, at 6. As Wisconsin concedes, had the court resolved the threshold question of whose purpose controls the other way, it would have found that Catholic Charities and its subentities “would qualify for the church exemption.” Tr. of Oral Arg. 73-74.
C
By failing to defer to the Bishop of Superior‘s religious view that Catholic Charities and its subentities are an arm of the Diocese, the Wisconsin Supreme Court violated the church autonomy doctrine.
Wisconsin‘s unemployment tax implicates the church autonomy doctrine. The statute on its face treats religious institutions differently from secular institutions: If an employer is “a church” or “an organization” controlled by a church that is “operated primarily for religious purposes,” it is exempt from the tax; if not, the tax applies.
But, the church autonomy doctrine leaves it to religious institutions to define their internal structure for themselves. Kedroff, 344 U.S., at 116. When deciding whether an employer qualifies as a religious institution, a civil court must accept the employer‘s understanding of its internal structure, just as it must accept the employer‘s understanding of its religious beliefs generally. See Milivojevich, 426 U.S., at 709 (“To permit civil courts to probe deeply enough into the allocation of power within a hierarchical church so as to decide religious law governing church polity would violate the First Amendment in much the same manner as civil determination of religious doctrine” (internal quotation marks and alterations omitted)).
Here, there is no dispute that, as a matter of church governance, the Bishop of Superior—the head of both the Diocese of Superior and Catholic Charities—considers Catholic Charities and its subentities to be an “arm” of the Diocese rather than a distinct organization. Supra, at 12. In other words, Catholic Charities and its subentities are corporate entities that the Diocese has created to carry out its religious mission. It is therefore dispositive that, as the State concedes, the Diocese qualifies for the religious employer exemption. Tr. of Oral Arg. 73-74. As an arm of the Diocese from the Bishop‘s perspective, Catholic Charities and its subentities must qualify as well, regardless of whether their activities, considered in isolation, would qualify as religious.
In holding otherwise, the Wisconsin Supreme Court entirely disregarded the Bishop‘s religious judgment, relying instead on the fact that Catholic Charities and its subentities “are organized as separate corporations apart from the church itself.” 411 Wis. 2d, at 35, 3 N. W. 3d, at 682. The court thus made the error of treating a religious institution as nothing more than its corporate entities.
*
The Court correctly holds that Catholic Charities and its subentities have suffered unconstitutional religious discrimination even on the assumption that those entities should be considered in isolation. See ante, at 9-11. I would reverse for an additional reason—that the Wisconsin Supreme Court violated the church autonomy doctrine. However incorporated, Catholic Charities and its subentities are, from a religious perspective, a mere arm of the Diocese of Superior. The Wisconsin Supreme Court should have deferred to that understanding, and its failure to do so amounted to an unlawful attempt by the State to redefine the Diocese‘s internal governance. SUPREME COURT OF THE UNITED STATES
No. 24-154
CATHOLIC CHARITIES BUREAU, INC., ET AL., PETITIONERS v. WISCONSIN LABOR & INDUSTRY REVIEW COMMISSION, ET AL.
ON WRIT OF CERTIORARI TO THE SUPREME COURT OF WISCONSIN
[June 5, 2025]
JUSTICE JACKSON, concurring.
The Federal Unemployment Tax Act (FUTA) allows a State to exempt from its unemployment-coverage mandate any “organization which is operated primarily for religious purposes and which is operated, supervised, controlled, or principally supported by a church or convention or association of churches.”
I write separately because, in my view, FUTA‘s religious-purposes exemption does not distinguish between charitable organizations based on their engagement in proselytization or their service to religious adherents. Nor does that exemption differentiate based on religious motivation, as the Government (as amicus) insists. Rather, both the text and legislative history of FUTA‘s religious-purposes exemption confirm that Congress used the phrase “operated primarily for religious purposes” to refer to the organization‘s function, not its inspiration. Put differently,
I
America constructed its unemployment-insurance system during the Great Depression to mitigate the disruptive effects of sudden job loss on workers. Wisconsin led the way in 1932, after identifying unemployment
FUTA operates by setting a federal minimum level of unemployment coverage that state programs must provide to remain eligible for certain grants and tax incentives.
Before 1970, FUTA allowed States to exempt nearly all nonprofit employers from unemployment coverage. See
The 1970 amendments further specified certain “new and narrower” categories of permissible nonprofit exemptions. St. Martin, 451 U. S., at 777; see also
II
This case arises out of a dispute about the meaning of the phrase “operated primarily for religious purposes” in
The Government urges us to hold that FUTA‘s use of the phrase “operated primarily for religious purposes” refers only to why the organization is engaging in the charitable work at issue—i.e., “the motivations that drive the organization to conduct its activities.” Brief for United States as Amicus Curiae 2. It argues that, in the context of an individual, the word “purposes” most naturally refers to “the mental state” accompanying their activities. Id., at 22. So, the Government contends, a charity‘s eligibility for the exemption must turn on its underlying motives. Ibid.
In my view, however, neither Wisconsin‘s motivations-plus-activities reading (the how) nor the Government‘s motivations-only interpretation (the why) accurately captures what Congress intended when it devised
A
Start with the text. To fall within
Notably, the language of the provision only goes so far, because
The Government does not dispute that “purposes” can refer to ends. Brief for United States as Amicus Curiae 15. But it views “ends” as relating solely to “an organization‘s fundamental motivation for its affairs,” not “the nature of [its] activities.” Id., at 15-16. The Government does not explain how it makes this logical leap—
The text of
Recall that, to be exempt under
The functional understanding of “operated primarily for religious purposes” also makes perfect sense. So interpreted, it addresses a different factor than prong two because it gets at what the church-run entity actually does. Workforce programs train workers. Hospitals care for the sick. Soup kitchens feed the hungry. Shelters house the homeless.
That said, I admit that
B
In the House and Senate Reports accompanying the 1970 FUTA amendments, Congress signaled that it designed the
To explain this, Congress included a series of examples distinguishing the kinds of church-run entities it thought were exemptible. On the exempt side of the line, the Reports list (1) a “college devoted primarily to preparing students for the ministry,” (2) “a novitiate,” and (3) “a house of study training candidates to become members of religious orders.” H. R. Rep., at 44; S. Rep. No. 91-752, pp. 48-49 (1970) (S. Rep.). On the nonexempt side of the line,
These examples are instructive. The exempt category as the Reports defined it lists solely church-run nonprofits that have service to the church itself as their main objective. A novitiate, for instance, is an entity that trains and houses novices who are deciding whether to pursue a life in a religious order or priesthood. Indeed, what unites all three “exempt” entities is what they do: preparing people for religious life and for service to the church, i.e., they all serve religious functions. By contrast, the nonexempt category consists of general charitable organizations affiliated with a church. A church-related “orphanage” or “home for the aged” is not “operated primarily for religious purposes“—at least within the meaning Congress intended that phrase to carry. H. R. Rep., at 44; S. Rep., at 49.
Through the Reports’ examples, Congress thus clarified that it does not matter how or why the entity goes about its work. All that matters is what it does. As such, orphanages, nursing homes, and charities like them—i.e., entities whose “purpose” is to care for children or tend to the elderly—do not exhibit what Congress considered to be “religious purposes” under this exemption. And that is true regardless of whether religion motivates the entity‘s work.
III
This function-based reading of “operated primarily for religious purposes” not only follows from the text and legislative history of
Consider the state unemployment-insurance scheme at issue here. Unemployed workers are not automatically eligible to receive unemployment benefits; those who have been terminated for “misconduct,” for example, may be ineligible.
For certain church-related employers—e.g., novitiates, houses of study, and colleges that train ministers—that assessment might “entangl[e] the state in employment disputes that turn on religious faith and doctrine.” Brief for Respondents 12. Imagine, for example, the adjudication of disputes over the sufficiency of a fired employee‘s prayers or the accuracy of their scriptural teaching. Indeed, it is precisely because of what novitiates, houses of religious study, and ministerial training colleges do (prepare individuals for religious life) that potential entanglement problems occur. By contrast, when a church-run entity provides general charitable services to the public, the same kinds
What is more, a motive-focused exemption inquiry presents potential entanglement problems of its own. If taken seriously as an eligibility requirement (as opposed to a rubberstamp for any organization that professes religious motives), it would require assessing whether an entity is really motivated primarily by religion—an intrusive exploration into the hearts and minds of those who run it. See Brief for United States as Amicus Curiae 19-21 (listing evidence courts might examine to assess a nonprofit‘s “true motivations“). Requiring courts to engage in the business of evaluating religious motivation is a sensitive endeavor. And here, it is unnecessary, because the church-affiliation prong already does that work. It actually serves no rational objective, as the sincerity of an entity‘s religious motives has little if anything to do with the problem Congress sought to address.
*
Church-related nonprofit employers care for the sick, feed the hungry, and improve the world in countless ways. Most do this—no doubt—for religious reasons. All do this thanks to their employees’ labor. As I read