The U.S. Supreme Court has declined to review a Gary, Ind., school case in which the bishop of the Gary Catholic Diocese sought to prevent the National Labor Relations Board from involvement in labor disputes on the grounds that such activity violates religious freedoms of the First Amendment.

At issue in the petition, which the court denied Monday, was whether the diocese could appeal directly to the courts when the NLRB assumes jurisdiction over union representation elections and unfair labor practice disputes rather than first exhausting administrative remedies through the NLRB.

In February, the Seventh U.S. Circuit Court of Appeals overturned a lower court decision that barred the NLRB from counting ballots in a Gary diocesan union representation election and from proceeding with an unfair labor practice complaint against the Most Rev. Andrew G. Grutka, bishop of the diocese.

After the appellate decision, the ballots were counted. The lay teachers voted 260 to 172 not to unionize.

The controversy resolves around the contention by the Gary diocese and several other Catholic school districts that NLRB intervention in parochial schools is an unconsitutional government intrusion into the church's mission.

The diocese said in its briefs it would be futile to raise the thorny religious liberty questions before the NLRB because of the board's recent pattern of involment in school labor disputes.

The high court's denial of the petition without comment lets stand the appellate decision on the jurisdiction question. The consitutional issue remains "on ice," according to William B. Ball of Harrisburg, Pa., attorney for the Gary diocese.

Yet to be reviewed in Gary is the complaint against the bishop. Ball indicated that if the labor board agrees Grutka committed an unfair labor practice, the NLRF's involvement again would be challenged in court.

While the Catholic Church has taught that workers have the right to administrators have raised concerns about the application of the trade union principle in their schools. Sponsors of the union say the real issue is not legal but a moral one aimed at dignity and justice for lay teachers.

The problem has become so great for the church that the American bishops formed a special subcommittee to propose guidelines for collective bargaining.

The subcommittee has begun extensive consultations with all parties and has issued a preliminary statement that is expected to be rewritten before the issue is put to all the bishops in November.