The Supreme Court unanimously ruled Thursday that Wisconsin violated the Constitution by forcing a Catholic nonprofit organization to pay into the state’s unemployment insurance program, delivering a win for religious liberty advocates and narrowing how far states can go in defining what counts as “religious.”
In an opinion authored by Justice Sonia Sotomayor, the high court found that the Catholic Charities Bureau of the Diocese of Superior qualifies for a religious exemption under state law, rebuking the state’s argument that the organization’s social services are too “secular” to merit protection.
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“There may be hard calls to make in policing that rule,” Sotomayor wrote. “But this is not one.”
The decision marks another entry in the high court’s growing list of First Amendment victories for faith-based plaintiffs. It comes amid a term packed with closely watched religious rights cases — from faith-based objections to LGBT-themed books in schools to an unsuccessful attempt to establish a Catholic charter school.
Catholic Charities, represented by the Becket Fund for Religious Liberty, sued after Wisconsin denied its bid to join the Catholic Church’s own unemployment program, which mirrors the state’s but is managed through the diocese. The state said the nonprofit organization didn’t qualify for an exemption because it doesn’t preach or limit services to Catholics, and most of its employees and clients aren’t church members.
The justices rejected Wisconsin’s test as constitutionally flawed.
Under Wisconsin law, groups “operated primarily for religious purposes” are exempt from paying into the state system. Catholic Charities argued that it meets that standard because its charitable work is inseparable from its religious mission to serve the vulnerable, even without explicit evangelization. The Supreme Court agreed, warning that Wisconsin’s approach would entangle the government in defining religious expression.
The ruling overturns a 2023 decision by the Wisconsin Supreme Court, which held that Catholic Charities’ job training, housing, and disability services were not “inherently religious.” That court’s reasoning sparked concern among religious freedom advocates, who said the decision penalized faith groups for expressing their religion through action rather than proselytization.
President Donald Trump’s Justice Department backed Catholic Charities in the case, arguing in a friend-of-the-court brief that the state’s policy violated the First Amendment by forcing officials to police which religious activities are “sufficiently religious” to warrant protection.
Wisconsin officials had warned that a ruling for Catholic Charities could spur other large religious employers, such as affiliated hospitals, to leave the state system, weakening the funding pool. Labor groups also argued that private church-run programs offer fewer protections for workers and exclude supplemental federal benefits such as those provided during the COVID-19 pandemic.
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But Catholic Charities said its system is faster, offers equal or better benefits, and aligns more closely with its mission.
Thursday’s decision underscores the high court’s broader skepticism toward government efforts to draw sharp lines between religious and secular conduct. While the justices have not always ruled in favor of faith groups, particularly in cases where justices recuse themselves or diverge on funding issues, they have consistently affirmed that the First Amendment bars states from second-guessing how religious beliefs are expressed.