The prohibition in Title VII against discrimination on the basis of religion is subject to the BFOQ exception, but it is also subject to three other provisions that apply only to religious discrimination.
Section 702 creates an exception for employment by religious organizations and schools "of individuals of a particular religion to perform work connected with the carrying on" of their activities; section 703(e)(2) creates a similar, and seemingly redundant, exception for religious schools; and section 701(j) defines "religion" to include "all aspects of religious observance and practice, as well as belief, unless an employer demonstrates that he is unable to reasonably accommodate to an employee's or prospective employee's religious observance or practice without undue hardship on the conduct of the employer's business." All of these provisions raise constitutional issues under the religion clauses of the First Amendment and have been interpreted to avoid constitutional doubts about their validity.
The exceptions for religious discrimination by religious organizations and schools in sections 702 and 703(e)(2) do not, according to their literal terms, allow discrimination on other grounds. Nevertheless, these exceptions have been interpreted to allow churches to employ ministers on any basis whatsoever, in order to avoid constitutional questions under the Free Exercise Clause. Other employees of religious organizations and schools are excepted only from the prohibition against discrimination on the basis of religion. These cases have also discussed the constitutional question whether the exception is either too narrow under the Free Exercise Clause, because it does not except religious institutions entirely from Title VII, or too broad under the Establishment Clause, because it entangles the government with religious institutions.
Similar questions, both statutory and constitutional, have arisen over the definition of "religion" in section 701(j) and, in particular, over the duty of employers to accommodate religious observances or practices "without undue hardship on the conduct of the employer's business." The Supreme Court resolved most of these questions in Trans World Airlines v. Hardison. It held that section 701(j) does not require an employer to accommodate an employee's religious practices at "more than a de minimis cost" and that accommodation by subordinating the seniority rights of other...