Community Lutheran School v. Iowa Department of Job Service

McGIVERIN, Justice

(dissenting).

I respectfully dissent from the result reached by the majority.

I would affirm the district court and hold that petitioner schools are not exempt from coverage under the Iowa Employment Security Law (I.E.S.L.) under Iowa Code section 96.19(6)(a)(6)(a) (1981) and the Federal Unemployment Security Act (F.U.T.A.), chapter 23 of the Internal Revenue Code. I also agree with the district court and the agency that coverage of petitioners under I.E.S.L. does not violate petitioners’ rights under U.S. Const., Amend. 1, due to the compelling state interest to minimize “the crushing burden of involuntary unemployment.” Smith v. Iowa Employment Security Commission, 212 N.W.2d 471, 472-73 (Iowa 1973).

I. Are the separately incorporated schools “operated primarily for religious purposes?” The petitioner schools were incorporated separately from the sponsoring churches. The question is whether the schools are “operated primarily for religious purposes” within Iowa Code section 96.-19(6)(a)(6)(a) and its equivalent in F.U.T.A., section 3309(b)(1)(A).

A. The majority relies heavily on St. Martin Evangelical Lutheran Church v. South Dakota, 451 U.S. 772, 101 S.Ct. 2142, 68 L.Ed.2d 612 (1981). However, two very important aspects of that case must be noted. First, unlike the schools before us, St. Martin’s was not separately incorporated; noting that the diversity of the structure and organization of church groups makes it impossible to lay down a single rule to govern all church-related organizations, the Supreme Court limited its holding to “only schools that have no legal identity separate from a church.” Id. at 782 n. 12, 101 S.Ct. at 2148 n. 12, 68 L.Ed.2d at 620 n. 12. Second, the Supreme Court was forced to overlook the legislative history which indicated an intent to bring employees such as those of the petitioner schools within F.U.T.A. because “indefinite congressional expressions cannot negate plain statutory language and cannot work a repeal or amendment by implication.” Id. at 788, 101 S.Ct. at 2151, 68 L.Ed.2d at 623.

The “plain” statutory language before us requires us to focus on the terminology: “operated,primarily for religious purposes.” I.R.C. § 3309(b)(1)(B); Iowa Code § 96.-19(6)(a)(6)(a). Because this language is not ambiguous, it is appropriate to resort to legislative history to aid in its application.

Congress, quite explicitly delineated the limits of the section 3309(b)(1) exemption as applied to institutions of higher education.

This paragraph excludes services of persons where the employer is a church or convention or association of churches, but does not exclude certain services performed for an organization which may be religious in orientation unless it is operated primarily for religious purposes and is operated, supervised, controlled, or principally supported by a church (or convention or association of churches). Thus, the services of the janitor of a church would be excluded but services of a janitor for a separately incorporated college, although it may be church related, would be covered. A college devoted primarily to preparing students for the ministry would be exempt, as would a novitiate or a house of study training candidates to become members of religious orders. On *293the other hand, a church related (separately incorporated) charitable organization (such as, for example, an orphanage or a home for the aged) would not be considered under this paragraph to be operated primarily for religious purposes.

H.R.Rep. No. 612, 91st Cong., 1st Sess. 44 (1969) (emphasis supplied). Identical language is found in S.Rep. No. 752, 91st Cong., 2d Sess. (1970) at 48-49, U.S.Code Cong. & Admin.News 1970, 3606. Thus, Congress clearly expected that the “operated primarily for religious purposes” language contained in section 3309(b)(1)(B) be narrowly construed, at least as applied to educational institutions.

B. I also agree with the district court’s analysis in the present case on this issue, which was in part as follows:

It seems to the Court that the petitioners place emphasis, in effect, on the motive of the churches — arguably their motive was to advance their religion through these parochial schools. The statutory test, however, is whether the organizations (being the petitioner corporations themselves) are operated primarily for religious purposes. It seems clear that operation of the schools by the petitioner corporations was for both purposes. In interpreting this statute it is not required to find that the educational purpose was the only purpose. It is clear that churches would not operate educational institutions unless they were an apt vehicle for advancing and perpetuating the religion. Yet, in order to advance their religious cause through schools, the churches must also educate academically or secularly and must do so to the minimum degree required by state laws. Failing this, they would lose their students to the public schools. Quantitatively the academic or secular state-required education probably dominates but it is sufficient for the issue here that the educational purpose is at least as dominant as the religious purpose and thus it seems inescapable that it cannot be said that the primary purpose of operating the schools is religious.

Accordingly, I would hold that the petitioner schools are covered under I.E.S.L. and F.U.T.A. and not entitled to an exemption therefrom. See Christian School Ass’n of Greater Harrisburg v. Commonwealth Dep’t of Labor and Industry, 55 Pa.Cmwlth. 555, 570, 423 A.2d 1340, 1347-48 (1980) (Wilkinson, J., dissenting) (even though an English course could be taught using examples from scripture, the primary purpose continues to be teaching English).

Parochial schools must pass state standards and certification to be able to function. Their main job is to educate students. Otherwise, they would not and could not exist. Their students would be compelled to attend state certified public schools. Therefore, it follows that the petitioner schools cannot be “operated primarily for religious purposes.” Educational purposes are primary or at least equal to religious purposes here.

II. What is the practical effect? As a practical matter, we should consider also the purpose and need of I.E.S.L. to minimize the trauma of involuntary unemployment on the employees of separately incorporated parochial schools.

Teachers who accept positions with state certified parochial schools frequently do so at a salary scale lower than that for comparable positions in public schools. Under the result reached by the majority, a teacher, who is terminated from employment with a separately incorporated parochial school, is not eligible for employment security benefits while unemployed and seeking work. The reason is because his former employer, the school, was exempted from- I.E.S.L. coverage and did not have to pay into the I.E.S.L. insurance fund.

On the other hand, a teacher terminated from the state certified public school system would be eligible for employment security benefits because his employer was covered under I.E.S.L. This strange result is not compatible with the basic purpose of the I.E.S.L.

I would uphold the decisions of the district court and the agency.

REYNOLDSON, C.J., and LeGRAND, J., join in this dissent.