In December, the U.S. Court of Appeals dismissed a $2 million religious discrimination suit against Costco. The case emerged from a change in Costco's dress code policy, which prohibited all facial jewelry except earrings. Kimberly Cloutier, a cashier and employee since 1997 had numerous body piercing and tattoos. Her supervisor informed her that she had to remove her eyebrow ring, which she refused to do on the grounds that displaying her piercing was a requirement of her religion as a member of the Church of Body Modification.

The Church of Body Medication has about 1,000 members and encourages its members to "grow as individuals through body modification and its teachings." The definition of body modification includes piercing, tattooing, branding, cutting and body manipulation.

Employers, who are required by federal law not to discriminate on the basis of religion, often face a difficult decision when an employee's religious practices and beliefs come into conflict with workplace rules and regulations. Most employers are familiar with requests for work-schedule changes to accommodate religious beliefs. Lately, there have been a growing number of complaints about dress code on the basis of religion.

Patricia Hicks, a managing partner with Littler Mendelson LLP says that the law guides a company's decisions in these cases. While the employer has an obligation to make reasonable accommodations, the employer is not bound to this if it would create "undue hardship" for the company. The rules, however, for "reasonable accommodation" and "undue hardship" are not clear-cut, and vary from case to case depending on the circumstances.

When faced with a religious accommodation situation, an employer's first step should be to strive for a reasonable accommodation that works for the individual employee. In Cloutier's case, her supervisor asked her to remove her eyebrow ring. She refused and filed a religious discrimination case the next day with the EEOC. Cloutier met with her store manager during her next shift and suggested that she could wear a flesh-colored band aid over the eyebrow ring. The store manager refused her suggestion, and told her to remove the piercing or go home. She went home. While waiting resolution of her discrimination claim, Cloutier was fired for unexcused absences. After negotiation with the EEOC, Costco agreed to let her return to work if she wore a plastic retainer in her piercings or a bandage to cover the jewelry. Cloutier now refused this accommodation on the grounds that her religion required her to display her piercings at all times. Negotiations stalled and the case went to court.

If an accommodation can't be reached, the employer's next step is to identify the business interests the company is trying to protect. In Costco's case, they were trying to maintain a professional image for their cashiers. The court decided that because of Cloutier's interaction with customers, Costco did have the right to ask her to remove her piercings.

Cloutier's no-compromise approach worked against her in court. However, it's important to note that the court did not decide on whether or not her religious claims were legitimate. Employers should be careful not to get caught up in the question of whether or not a religion and its beliefs are reasonable. Hicks advises erring on the side of attempting to accommodate someone's religion to save the expense and frustration of litigation.