Unemployment Insurance – Religious Purposes Exemption – First Amendment

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WI Court of Appeals – District III

Case Name: Catholic Charities Bureau, Inc. v. State of Wisconsin Labor and Industry Review Commission [Recommended for Publication]

Case No.: 2020AP002007

Officials: Stark, P.J.

Focus: Unemployment Insurance – Religious Purposes Exemption – First Amendment

This unemployment insurance case requires the court to determine the proper interpretation of the religious purposes exemption under WIS. STAT. § 108.02(15)(h)2. (2019-20). The petitioner-respondents are the Catholic Charities Bureau, Inc. (CCB) as well as four of its sub-entities. CCB asserts that it is exempt from Wisconsin’s Unemployment Compensation Act under § 108.02(15)(h). because it is “operated primarily for religious purposes.” In considering whether it is exempt under the statute, CCB argues that the proper consideration is whether it is operated primarily for a religious motive or reason.

Conversely, the Department of Workforce Development (DWD) and the Labor and Industry Review Commission (LIRC) contend that whether CCB is operated primarily for religious purposes depends on whether its activities are primarily religious in character. The parties also dispute whether the religious purposes exemption is ambiguous and, if so, how that ambiguity should be resolved. Finally, both CCB and DWD argue, albeit for different reasons, that adopting the opposing party’s interpretation of the religious purposes exemption will violate the First Amendment to the United States Constitution.

The appeals court ruled that the LIRC correctly determined that CCB and its sub-entities are not organizations operated primarily for religious purposes; thus, employees of the organizations do not perform their services under excluded employment as that is defined under § 108.02(15)(h), and thus reverse the circuit court’s order.

Reversed.

Decided 02/14/23

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