The Supreme Court heard arguments Tuesday, on one of its last days of oral arguments for cases from the October 2024 term, in Catholic Charities Bureau v. Wisconsin Labor & Industry Review Commission.

The case concerns the constitutionality of Wisconsin’s state unemployment tax exemption as applied to the work of the Catholic Charities Bureau. At issue is whether a state can determine for itself what qualifies as the “religious behavior” of an organization for purposes of granting or denying government benefits without violating the Constitution’s First Amendment free exercise and establishment clauses.  

Apparent from the arguments and the strenuous questioning of Wisconsin’s assistant attorney general, the justices seem inclined to side with Catholic Charities and overturn the Wisconsin Supreme Court’s ruling to the contrary.   

Wisconsin exempts from the state’s unemployment tax system certain religious organizations that are (1) “operated, supervised, controlled, or principally supported by a church or convention or association of churches” and (2) are also “operated primarily for religious purposes.”

While the parties to the litigation all agree that the Catholic Charities Bureau and the sub-entities under its membership are controlled by a church (the local Catholic Church Diocese), they disagree on whether the state can lawfully define what constitutes a “primarily religious purpose.”

In 2016, a Wisconsin labor commission denied the charities’ request for an exemption because it determined that while the charities’ services to disabled individuals may be motivated by religious reasons, the nature of the work itself was secular.

The Wisconsin Supreme Court agreed, holding that the group could not be operating for primarily religious purposes because it did not “attempt to imbue” people who participated in its programs and services “with the Catholic faith nor supply any religious materials to program participants or employees.”

Catholic Charities sought the Supreme Court’s review to settle the question of whether Wisconsin had violated the First Amendment’s religion clauses by denying it an otherwise-available tax exemption simply because Catholic Charities didn’t meet the state’s own criteria for “religious behavior.”

Arguing on behalf of Catholic Charities was Eric Rassbach from the Becket Fund for Religious Liberty.

© The Daily Signal