Wisconsin has chosen to exempt many religious entities from its unemployment-tax laws. In a state court case, the Catholic Charities Bureau—a social-services provider—argued that because their activities arise out of their religious beliefs, they must be granted an exemption. The Wisconsin Supreme Court rejected this argument, ruling that Catholic Charities is not “operated primarily for religious purposes” as required for the exemption. In December 2024, the U.S. Supreme Court granted Catholic Charities’ petition for review.
On March 5, 2025, Americans United filed an amicus brief before the U.S. Supreme Court. Our brief argues that the First Amendment does not prohibit states from offering limited, categorical religious exemptions or from distinguishing between religious and nonreligious entities and activities in assessing the applicability of exemptions, as Wisconsin has done in this case. Our brief points out that, throughout American history, legislatures and courts have drawn similar lines in determining the appropriate scope and nature of religious exemptions. It also points out that such distinctions remain at the heart of many contemporary statutory schemes. Our brief concludes that, if the Court accepts Catholic Charities’ argument, the net effect will likely be fewer religious exemptions, as some legislatures will respond by repealing existing exemptions or declining to approve new ones. In short, we argue that Catholic Charities’ position would harm religious freedom in the name of protecting it.
Our brief was joined by the American Civil Liberties Union, the ACLU of Wisconsin, Bend the Arc: A Jewish Partnership for Justice, Interfaith Alliance, National Council of Jewish Women, the Reconstructionist Rabbinical Association, and Sadhana: Coalition of Progressive Hindus.
On June 5, 2025, in a narrow decision, the Supreme Court ruled in favor of Catholic Charities. The Court held that the line drawn by the Wisconsin Supreme Court amounted to impermissible denominational favoritism.
