Unemployment exemption under review

PORTLAND – The Maine Supreme Judicial Court will consider today whether the Maine Sea Coast Missionary Society is exempt from paying unemployment benefits because its goals and mission are based in religion or whether its mostly secular charitable activities require it to pay the benefits.

It is the first time the state’s high court has heard arguments on the issue.

Based in Bar Harbor, the society is a nonprofit organization founded in 1905 that serves coastal and island communities in a four-county area from the Canadian border to Monhegan Island. Its mission includes “reach[ing] out to show God’s love and compassion to marginalized people.”

State statutes exempt churches, associations of churches and organizations that are operated primarily for religious purposes and are controlled or principally supported by a church or association of churches from paying unemployment benefits.

The case in which the justices will hear arguments today grew out of an employment dispute between Ann Schwartz of Seal Harbor and the mission. Schwartz worked as the organization’s fund-raiser from May 2000 until December 2002, when she was fired.

The plaintiff filed for unemployment benefits, but was determined to be ineligible because the Maine Unemployment Insurance Commission ruled the society exempt from paying contributions. The commission found in 2003 that the society was entitled to the exemption allowed for religious organizations.

Schwartz appealed that decision to Hancock County Superior Court. Justice Andrew Mead ruled in August 2004 that the commission had erred in finding that the society was a church organization, but affirmed the commission’s decision. The judge found that the mission was operated primarily for religious purposes and was supported principally by an association of churches.

Efforts to reach the attorneys involved in the case were unsuccessful.

Attorney A.J. Grief of Bangor, representing Schwartz, argued in his brief to the state’s high court that “although the motivation for the creation of the mission may have been religious, its purpose today is primarily humanitarian and charitable, but not religious.”

The mission in 2002 spent two-thirds of its $1.7 million operating budget on the vessel Sunbeam, the mission’s telemedicine program that brings a nurse to island residents, and on an after-school and summer program conducted on various sites that did not include religious teaching, Grief wrote. The society also distributed emergency assistance grants to 112 families in 2001. Other “secular” activities conducted by the mission include providing companions for shut-ins and running a secondhand shop and food pantry, he argued.

The mission also derived less than 2 percent of its income from church contributions while Schwartz worked there, according to Grief. A majority of the society’s income in 2002 was earned from endowments left to it by individuals rather than from contributions from churches, the attorney argued.

The society’s attorney, Kevin Cuddy of Bangor, argued in his brief that a religious organization may undertake charitable activities without losing its religious character.

Because the society’s mission statement includes promoting the “advancement of the Christian belief through its Christian ministry of compassion and justice, accompanied by specific charitable and beneficial outreach manifesting that belief, then the missionary program … of Christian philosophy and Christian action most certainly has a religious purpose,” Cuddy wrote.

“The commission’s reasonable interpretation of its own statute is entitled to deference,” Assistant Attorney General Elizabeth Wyman, who is representing the unemployment commission, argued in her brief.

Wyman also wrote that during its 100-year history, the mission has relied on a group of nearly 100 churches for more than monetary support.

“[T]he mission relies on 96 churches and their congregations as well as hundreds of individual Christians, to provide not only financial support but also moral and spiritual support of its work,” Wyman wrote. “Without that support, the mission would not be able to maintain the [ministry] that has so successfully served the coastal community for almost 100 years.”

The effect that the court’s ruling might have on organizations that are similar to the mission, such as the Maine Council of Churches, depends on how narrowly or broadly the justices rule.

They could fashion a decision that applies only to the society or interpret the statute in a way that reduces the number of organizations exempt from paying unemployment benefits.

There is no time frame in which the justices must make their decision.

In a separate lawsuit, Schwartz has sued the mission, charging that it discriminated against her because she is a woman. A jury trial in that case is scheduled to begin in May in Hancock County Superior Court.