Cook County Record

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Panel: Christian school must make unemployment insurance payments; doesn't qualify for religious exemption

By Jonathan Bilyk | Mar 19, 2014


A Christian school in western Illinois will need to pay into the state’s unemployment insurance program, after a majority of an appeals panel determined that, though the school’s instruction was religious enough, it did not meet all of the standards spelled out in the law to qualify for a religion-based exemption from making the payments.

On March 11, the Third District Appellate Court in Ottawa ruled in favor of the Illinois Department of Employment Security (IDES), upholding the state agency’s determination that Unity Christian School in Fulton was not entitled to the exemption, as the school believed it should be.

The opinion was authored by Justice Daniel L. Schmidt, with Justice Robert L. Carter concurring. Justice Tom M. Lytton concurred in part, but dissented in part as well.

The appellate court decision overturned the ruling of Whiteside County Circuit Judge John L. Hauptman, who had ruled that the IDES had erred in determining the private Christian school should not be exempt under the law to pay into the state’s unemployment system.

The matter arose in 2010, when a former Unity Christian School employee filed with the IDES for unemployment benefits.

At that time, the state agency determined that the school, which has 170 students enrolled in kindergarten through 12th grade, should be required to make payments for unemployment insurance for its employees.

It further determined that the school should make payments for the years dating back from 2007 to 2011, as well.

Unity filed for administrative review, arguing it was exempt as a religious school under the Unemployment Insurance Act.

The review was conducted in 2011, and a hearing officer from the IDES found that, despite the religious nature of the school, its curriculum and instruction, the school “was operated primarily for secular educational purposes, not religious purposes.”

The matter was appealed to the director of IDES, whose office affirmed the hearing officer’s decision, and “noted that Unity was separately incorporated and autonomous” from any particular church, group of churches or Christian denomination.

The school then sued the IDES and its director in Whiteside County Circuit Court, claiming, as before, the department had erred, and it was exempt from making the payments. It also claimed the state agency had violated the Religious Freedom Act.

The trial judge stayed proceedings on the Religious Freedom Act question, but overturned the IDES’ decision “in light of Unity’s compelling arguments.”

On the agency's appeal, however, the Third District Appellate Court determined that the trial judge, not the department, had erred in the matter.

The appeals panel noted that, to qualify for an exemption, the school needed to meet three requirements: that it not be a college; that it be operated primarily for religious purposes; and that it be operated or “principally supported” by a church or group of churches.

The justices unanimously found that, while the school had been founded by a church, and received support from certain churches, it operated under an autonomous board and supported itself largely through tuition and fees charged to parents of students enrolled at the school.

On those grounds, the justices overturned the lower court ruling and upheld the state agency's determination that the school was not exempt from paying unemployment insurance.

The justices, however, split on the question of whether the school was “operated primarily for religious purposes.”

Justices Schmidt and Carter said, given the school’s incorporation of the Christian faith into virtually every class, and the school’s charter, “we cannot fathom a different primary purpose other than religion in Unity’s case.”

The two justices noted that the department found that “the majority of class time was spent on … secular topics such as mathematics, grammar or science,” and therefore, Unity “could not possibly prove that it was operated primarily for a religious purpose.”

The justices, however, said they believed that “argument defies reality,” as the “primary purpose of the school is to teach those secular subjects in a faith-based environment.”

They said the department’s determination could be so narrow as to limit the exemption only to certain “pre-seminary and novitiate” schools.

“Under this construct, no separately organized parochial school would be subject to exemption,” they said. “If the parents of Unity’s students wanted them to attend a school that did not incorporate the principles of their Christian faith, they would simply sent them to public schools.”

Justice Lytton, however, disagreed with the majority’s reasoning on that question, calling their treatment of the question “unnecessary and gratuitous.”

He said he believed the school had still more to prove regarding the primarily religious nature of its existence and instruction.

Lytton argued that, while the standard for exemption should not be “unobtainable,” that “the majority has gone to the opposite extreme – finding that a school is operated primarily for religious purposes when it includes any amount of religious instruction.”

He said such a school needs to show that it is “preeminently and fundamentally religious” – a feat not accomplished by the evidence presented by the Unity school.

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