The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 5434 January 19, 1979 EMPLOYMENT SECURITY LAW: Employees of religiously-affiliated schools RELIGIOUS ORGANIZATIONS AND SOCIETIES: Employees subject to employment security law Persons employed by a church, convention or association of churches, or an organization operated primarily for religious purposes by any of them in the operation of religiously-affiliated elementary and secondary schools are excluded from coverage under the Michigan Employment Security Act. Honorable David A. Plawecki State Senator The Capitol Lansing, Michigan You have requested my opinion on the following question: Whether employees of religiously affiliated elementary and secondary schools would be covered for employment security payments pursuant to 1936 Ex Sess PA 1, Sec. 43(o)(3), as amended by 1977 PA 277, where the schools are operated by a church or a convention or association of churches or an organization which is controlled by a church or a convention or association of churches. 1936, Ex Sess PA 1; MCLA 421.1 et seq; MSA 17.501 et seq, is known as the Michigan Employment Security Act, hereinafter referred to as MESA. Basically, MESA, supra, provides for the payment of certain monetary benefits determined in accordance with the weekly benefit rate set forth in section 27 of MESA, supra, to an unemployed individual who was in the employ of an employer subject to MESA, supra, as set forth in section 41 of MESA, supra. For the purposes of MESA, supra, employment is defined as service for renumeration under any contract for hire where the employee is under the control (1) or direction of the employer as to the performance of his services, as provided in section 42 of MESA, supra. Certain employments are excluded from coverage pursuant to section 43 of MESA, supra. Each employer subject to MESA, supra, is required to pay contributions to the Michigan Employment Security Commission based upon the rates prescribed in section 19 of MESA, supra, except that nonprofit organizations may elect to make reimbursement payments to the Commission in lieu of contributions in accordance with section 13a of the MESA, supra. Of critical importance to your inquiry is the exclusion found in MESA, Sec. 43(o)(3), as last amended by 1977 PA 277. Prior to the enactment of 1977 PA 277, amending MESA, Sec. 43(o), supra, this section, in pertinent part, read as follows: 'For the purposes of section 42(8), (9), and (10), the term 'employment' does not apply to service performed in any of the following situations: '(1) In the employ of (i) a church or convention or association of churches; or (ii) an organization which is operated primarily for religious purposes and which is supervised, controlled, or principally supported by a church or convention or association of churches. '(2) By a duly ordained, commissioned, or licensed minister of a church in the exercise of the ministry or by a member of a religious order in the exercise of duties required by the order. '(3) In the employ of a school which is not an institution of higher education and which service is also excluded from the term 'employment' as defined in the federal unemployment tax act solely by reasons of 26 U.S.C. section 3306(c)(8). By enactment of 1977 PA 277, the legislature amended section 43(o) of MESA, supra, re-enacting subsections (1) and (2) in their entirety, but amending subsection (3) to read in pertinent part as follows: 'Before January 1, 1978, in the employ of a school which is not an institution of higher education and which service is also excluded from the term 'employment' as defined in section 3306(c)(8) of the internal revenue code. . . .' (Emphasis supplied.) This examination of the legislative history of MESA, Sec. 43(o)(1)(2) and (3), supra, demonstrates a manifest intent on the part of the legislature to terminate the exemption of the employment of a person in the employ of a school which is not an institution of higher education after December 31, 1977. At the same time, the legislative intent is clear that persons employed by a church or convention or association of churches or an organization which is operated primarily for religious purposes and which is supervised, controlled or principally supported by a church or convention or association of churches are excluded from the term 'employment'. Recent federal cases have recognized that persons working in some religiously-affiliated, nonpublic elementary and secondary schools are often employees of the church or religious institution through its Bishop and pastors or other religious leaders, and not employees of the school itself. Thus, in Caulfield v Hirsch, ---- F Supp ---- (USDC, ED Pa); 95 LRRM 3164 (1977), the Federal District Court ruled that the application of the National Labor Relations Act, hereinafter referred to as the NLRB Act, 29 USC, Sec. 151, et seq, to the parochial elementary schools of the Archdiocese of Philadelphia violated the Religion Clauses of the First Amendment to the Constitution of the United States. The Court noted in footnote 18 that the determination of the National Labor Relations Board, hereinafter referred to as the NLRB, that the employer, for the purposes of the NLRB Act, supra, are the pastors of the 275 parish churches operating parochial schools and the Archdiocese of Philadelphia, was not contested in the proceeding. More recently, in The Catholic Bishop of Chicago v National Labor Relations Board, 559 F2d 1112 (CA 7, 1977), cert granted, 434 US 1061; 98 S Ct 1231; 55 L Ed 2d 760 (1978), (2) the United States Court of Appeals considered an NLRB order that a union representation election to be held at two secondary schools operated by the Catholic Bishop of Chicago, as a corporation sole. The Catholic Bishop of Chicago claimed the NLRB's action violated the Religion Clauses of the First Amendment. The Court found that the Bishop was the employer of the employees of the parochial schools in the Diocese. Grutka v Barber, 549 F2d 5, 6 (CA, 1977), cert den, 431 US 908; 97 S Ct 1706; 52 L Ed 2d 394 (1977). In ruling that the Religion Clauses precluded the NLRB from invoking its jurisdiction the Court held: '. . . A church which chooses to educate its own young people in schools which it is required essentially to finance without governmental aid should because of the essentially religious permeation of its curriculum be equally freed of the obviously inhibiting effect and impact of the restrictions of the National Labor Relations Act in conducting the teaching program of those schools. We, of course, would assume that a church so choosing would usually not itself be unmindful of the desirability of affording its young people an education which would suitably equip them mentally for participation in daily life and that this obvious desire will require the securing and retention of teachers of competence, many of whom in this day and age will not be altogether motivated in seeking employment by the love of the institution which they are serving.' The Catholic Bishop of Chicago, supra, at 1130. In Michigan, 1867 PA 207; MCLA 458.1 et seq; MSA 21.1691 et seq, empowers the Roman Catholic Archbishop and Bishops, and their successors, to hold property for the use and benefit of the church, including schools and educational purposes. It is well known that such Archbishop and Bishops operate elementary and secondary schools in this State. It should also be noted that religiously-oriented elementary and secondary schools are operated both by churches, synagogues and other religious organizations of different religious faiths and by nonprofit organizations not necessarily a part of any church, synagogue or other religious organization. In 1971 when the Michigan Supreme Court decided Traverse City School District v Attorney General, 384 Mich 390, 430; 185 NW2d 9, 27 (1971), the Court found that 274,000 students were in attendance in nonpublic elementary and secondary schools, of which 270,000 attended church-related elementary and secondary schools. Thus, it is clear that in Michigan there are both church-related and other nonchurch-related elementary and secondary schools. In addition, it is not clear that all the church-related schools are operated by the church or its representative without separate legal identity in each school. It is a fundamental rule of construction of statutes that the intention of the legislature must be ascertained and given effect. Gardner-White Co v State Board of Tax Administration, 296 Mich 225; 295 NW 624 (1941). This intent is to be gathered from the whole statute and its amendments. Every part of the statute should be given effect, if possible. Smith v City Commission of Grand Rapids, 281 Mich 235; 274 NW 776 (1937). Meaning and effect may be given to both MESA, Sec. 43(o)(1) and (3). This can be done by ascertaining whether the unemployed person was employed by a church, convention or association of churches, or an organization operated primarily for religious purposes by any of them, or by a religiously-oriented school which is a distinct legal entity and not an extension of a church, convention or association of churches or an organization operated primarily for religious purposes. If the elementary or secondary school is operated by the church, convention or association of churches, or an organization of any of them, through its Bishop, pastor or representative or representatives and has no separate legal identity, I am constrained to conclude that such a person was not in the employ of a school and his employment is not subject to the provisions of MESA, supra, after December 31, 1977. However, if such a person is in the employ of a religiously-oriented school which has a separate legal existence apart from the organizations listed in MESA, Sec. 43(o)(1), then it is my opinion that the exclusion found in MESA, Sec. 43(o)(1), supra, is inapplicable. Under such circumstances, that person would be in the employ of a school and his employment would be covered by the provisions of MESA, supra, after December 31, 1977. I am aware of the fact that on April 18, 1978 the Honorable Ray Marshall, Secretary of Labor of the United States, in a letter addressed to the most Reverend Thomas E. Kelly, O.P., gave an administrative construction to Public Law 94-566 that employees of church-related elementary and secondary schools were covered by the Federal Unemployment Tax Act. It should be noted that this administrative construction is not, to our knowledge, supported by an opinion of the Attorney General of the United States. Further, the letter makes no reference to the decisions in Caulfield, supra, and The Catholic Bishop of Chicago, supra, which held that the Catholic dioceses, involved through their Bishops and pastors, were the employers of teachers in elementary and secondary schools operated by the church, even though the NLRB or its representative was a party in each of the cases. Also, the Marshall letter apparently assumes that all persons working in religiously-affiliated elementary and secondary schools are employed by the school, when it is abundantly clear that many of them, are, in fact, employed by a church, synagogue, or its representatives. It is therefore my opinion that persons employed by a church, convention or association of churches, or an organization operated primarily for religious purposes by any of them in the operation of religiously-affiliated elementary and secondary schools operated by any of them are excluded from coverage under MESA, Sec. 43(o), supra. Frank J. Kelley Attorney General (1)
(2)
The issue of whether the Catholic Bishop is the employer is not before the United States Supreme Court. However, if this issue is discussed by the Court and the decision affects this opinion, it may be necessary to review the conclusion stated herein.