A Cook County judge ruled Wednesday that a religious nonprofit that provides after-school services to kids is exempt from paying unemployment taxes, overturning a state review board’s decision.
Circuit Court Judge James McGing reversed the decision made by the Illinois Department of Employment Security’s Board of Review, writing in his opinion that the board’s decision to require the nonprofit to pay taxes was “clearly erroneous.”
The nonprofit, By the Hand Club for Kids, “seeks to evangelize impoverished Chicago schoolchildren,” according to court documents, and was incorporated as a nonprofit under the Moody Church, 1635 N. LaSalle Drive, in Lincoln Park in 2005.
With an annual budget of $8 million, the nonprofit serves hundreds of Chicago Public Schools students, providing them with a Bible, field trips, meals, tutoring and more for free, according to court documents.
“We’re obviously pleased,” said Paul Winters, one of three Wagenmaker & Oberly attorneys who worked on the case.
“We think that it provides some good road markers for the way cases like this should be decided in the future,” Winters said.
By the Hand Club for Kids was represented by Winters and other local attorneys along with the organization Alliance Defending Freedom, a conservative Christian legal group that has drawn fire from LGBTQ groups and the Southern Poverty Law Center for its positions on LGBTQ issues. Alliance Defending Freedom recently represented the Colorado baker who wouldn’t make a wedding cake for a same-sex couple whose case went before the U.S. Supreme Court.
“I’m not familiar with any of that honestly,” Winters said. “They’ve been good co-counsel on this.”
Bob Gough, spokesman for the Department of Employment Security, said the department is reviewing the decision.
When a former employee of By the Hand Club for Kids, Kim Wimberly — who is named as a defendant in the case — left her job as the nonprofit’s human resources director and volunteer coordinator in 2016, she applied for unemployment compensation, according to court documents.
The group argued it wasn’t required to provide unemployment compensation because Wimberly left voluntarily and because, as a religious organization, it was exempt under the Illinois Unemployment Insurance Act.
When the issue of the nonprofit’s religious exemption was brought before the Department of Employment Security, a state referee and the department’s Board of Review upheld the decision that the nonprofit wasn’t exempt.
The Board of Review characterized By the Hand Club for Kids as “essentially an after school program” and therefore not exempt from paying unemployment taxes.
McGing disagreed, saying that “the religious nature of the program is clear in everything they do.”
By the Hand Club for Kids “does indeed provide many services that could, in a different context, be considered secular. But context is important,” McGing wrote in his opinion.
In his decision, McGing pointed to factors that contributed to a faith-based environment, citing Bibles being given to every student, students participating in Bible study and religious activities, the requirement that all staff members be Christian and the nonprofit measuring its success by how many students become Christian.
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