structural:scholar_edition
Facts

Alfred Leo Smith and Galen Black were members of the Native American Church and counselors at a private drug rehabilitation clinic. They were fired because they had ingested peyote, a powerful entheogen, as part of religious ceremonies at the Native American Church. At the time, intentional possession of peyote was a crime under Oregon law without an affirmative defense for religious use. The counselors filed a claim for unemployment compensation with the Employment Division of the Oregon Department of Human Resources, but the claim was denied because the reason for their dismissal was deemed work-related "misconduct". The Oregon Court of Appeals reversed that ruling, holding that denying them unemployment benefits for their religious use of peyote violated their right to exercise their religion. The Oregon Supreme Court agreed, although it relied not on the fact that peyote use was a crime but on the fact that the state's justification for withholding the benefits — preserving the "financial integrity" of the workers' compensation fund — was outweighed by the burden imposed on the employees' exercise of their religion. The state appealed to the U.S. Supreme Court, again arguing that denying the unemployment benefits was proper because possession of peyote was a crime.