Florida Bar Journal

The U.S. Supreme Court’s Unanimous Decision in Catholic Charities Bureau, Inc. v. Wisconsin Labor and Industry Review Commission Will Have a Substantial Effect on Florida’s Pro Bono Organizations

On June 5, 2025, the U.S. Supreme Court issued its opinion in Catholic Charities Bureau, Inc. v. Wisconsin Labor and Industry Review Commission, 145 S. Ct. 1583 (2025). The case involved several amici curiae parties^[1] and received a lot of media attention.^[2] Justice Sotomayor, writing for a unanimous Court, explained the Court “granted certiorari to decide whether the Wisconsin Supreme Court’s interpretation of §108.02(15)(h)(2), as applied to petitioners, violates the [Establishment Clause of the] First Amendment.”^[3] “The Court holds that it does.”^[4]

The five petitioners consist of the Catholic Charities Bureau, Inc., and four separately incorporated entities: Barron County Development Services, Inc.; Black River Industries, Inc.; Diversified Services, Inc.; and Headwaters, Inc.^[5] The Court noted that §108.02(15)(h)(2), exempting certain organizations from paying taxes into the state’s unemployment compensation system, “covers nonprofit organizations ‘operated, supervised, controlled, or principally supported by a church or a convention or association of churches.’”^[6]

The Court determined that the “strict scrutiny” standard of review applied because Wisconsin’s statute “distinguishes among religions based on theological differences,” reversed the Wisconsin Supreme Court’s decision, and “remanded for further proceedings not inconsistent with this opinion.”^[7]

The Court noted that the Wisconsin Supreme Court found petitioners’ activities were “secular in nature” based upon the following findings: 1) “Petitioners ‘neither attempt to imbue program participants with the Catholic faith nor supply any religious materials to program participants or employees;’” 2) “‘Both employment with the organizations and services offered by the organizations are open to all participants regardless of religion;’” and 3) “[T]he charitable services offered by the sub-entities could ‘be provided by organizations of either religious or secular motivations.’”^[8]

The Wisconsin Supreme Court addressed petitioners’ three arguments that its interpretation of §108.02(15)(h)(2) violated the First Amendment’s religion clauses for three reasons: 1) “The court first held that its interpretation did not transgress church autonomy principles because the exemption ‘neither regulates internal church governance nor mandates any activity;’” 2) “The court also determined that there was no risk of excessive government entanglement with religion because Wisconsin’s exemption does not ask whether petitioners’ ‘activities are consistent or inconsistent with Catholic doctrine;’” and 3) “Finally, the court rejected petitioners’ argument that its interpretation contravened First Amendment principles of ‘“neutrality among religions”’ by ‘“favor[ing] religious groups that require those they serve to adhere to the faith of that group or be subject to proselytization.’”^[9]

Justice Sotomayor explained the Court’s holding was limited to only one of the issues decided by the Wisconsin Supreme Court: “The Court today addresses only the denominational neutrality challenge [argument 3] raised by petitioners and does not reach the further two constitutional arguments considered by the Wisconsin Supreme Court.”^[10] She went on to explain that “‘[t]he clearest command of the Establishment Clause’ is that the government may not ‘officially prefe[r]’ one religious denomination over another.”^[11]

But Wisconsin argued that the Court’s decision in Gillette v. United States, 401 U.S. 437 (1971), “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.”^[12] The Court found Gillette “inapposite” because: 1) the Military Selective Service Act of 1967 afforded a “conscientious objector” status to any person who, “by reason of religious training and belief,” was “conscientiously opposed to participation in war in any form” and 2) the exemption “focused on individual conscientious belief, not on sectarian affiliation.” Therefore, conscientious objector status was “available on an equal basis” to members of all religions under the Military Selective Service Act.^[13]

The Court concluded the “exemption provided only to organizations that engage in proselytization or serve only co-religionists is not, on its face, ‘available on an equal basis’ to all denominations…deemed subject to strict scrutiny, including in the context of religious exemptions.”^[14] When pressed at oral argument as to what would qualify as “distinctively religious activity,” the Wisconsin Supreme Court’s response came “down to...whether the employees of the organization are expressing and inculcating religious doctrine.”^[15]

Justice Sotomayor countered this argument: “Because §108.02(15)(h)(2) ‘grants denominational preferences of the sort consistently and firmly deprecated in our precedents,’ it ‘must be invalidated unless it is justified by a compelling governmental interest’ and is ‘closely fitted to further that interest.’”^[16] She also criticized Wisconsin’s arguments because the State failed to “explain how the theological lines drawn by §108.02(15)(h)(2) are narrowly tailored to advance that asserted interest, particularly as applied to petitioners,”^[17]and “fail[ed] to demonstrate that §108.02(15)(h)(2) is ‘closely fitted to further’ that anti-entanglement interest.”^[18] Justice Sotomayor concluded:

It is fundamental to our constitutional order that the government maintain “neutrality between religion and religion.” Epperson [v. Arkansas, 393 U.S. 97, 104 (1968)]. 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 survive such scrutiny, the judgment of the Wisconsin Supreme Court is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.^[19]

Justice Thomas concurred separately because he believed “the Wisconsin Supreme Court’s first holding was also wrong.”^[20] Justice Thomas concluded:

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….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.^[21]

Justice Jackson concurred separately because she believed “FUTA’s religious-purposes exemption does not distinguish between charitable organizations based on their engagement in proselytization or their service to religious adherents.”^[22] She summarized:

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 §3309(b)(1)(B), evaluating whether a church-affiliated nonprofit “operate[s] primarily for religious purposes” is not a matter of assessing the sincerity or primacy of its religious motives. Instead, as with so many other interpretive issues, determining what the religious-purposes exemption means involves attempting to discern what Congress was trying to achieve. Here, Congress sought to extend to most nonprofit workers the stability that unemployment insurance offers, while exempting a narrow category of church-affiliated entities most likely to cause significant entanglement problems for the unemployment system — precisely because their work involves preparing individuals for religious life. It is perfectly consistent with the opinion the Court hands down today for [s]tates to align their §3309(b)(1)(B)-based religious-purposes exemptions with Congress’s true focus.^[23]

The Court’s opinion was unusual in that it was unanimous. However, as with many decisions, the Court raises more issues than the Court resolves. For example, as Justice Thomas pointed out, “Catholic Charities and its sub-entities are, from a religious perspective, a mere arm of the Diocese of Superior….”^[24]

The Court’s decision will have serious implications with respect to all nonprofit charitable organizations in Florida associated with a religion, especially the Catholic Church. Florida, like Wisconsin, exempts “[a]n organization that is operated primarily for religious purposes and that is operated, supervised, controlled, or principally supported by a church or a convention or association of churches.”^[25]

Moreover, many of Florida’s pro-bono organizations are tax-exempt and, therefore, are eligible for funding or grants from programs administered by the federal or state government.^[26] As Justice Jackson stated in her concurring opinion, there are “many other interpretive issues, determining what the religious-purposes exemption means.”^[27]

This column is submitted on behalf of the Appellate Practice Section, Joe Eagleton, chair, and Benjamin Paley, Matthew Cavender, Dimitri Peteves, Sydney Feldman-D’Angelo, and Eleanor Sills, editors.