Abercrombie Ruling: What the Supreme Court Decision Means for Retail

Abercrombie & Fitch
An Abercrombie & Fitch store in San Francisco.
Getty Images

Experts say retailers across the country should take a closer look at their dress policies following the U.S. Supreme Court’s 8-1 ruling in favor of a Muslim woman who sued Abercrombie & Fitch when the retailer failed to hire her because she wore a religious headscarf.

“Any time a case makes it to the Supreme Court, it’s a big deal,” said Matt Priest, president of the Footwear Distributors & Retailers of America. “If retailers are not going back and double-checking what their policies are and ensuring that if there aren’t accommodations built into those policies — that it is addressed, I think they’re doing their company and their employees a disservice.”

In 2008, Abercrombie refused to hire Samantha Elauf, a practicing Muslim, because she donned a headscarf as part of her reli­gious obligations, which conflicted with Abercrombie’s employee dress policy.

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The Equal Employment Opportunity Commission (EEOC) filed suit on Elauf’s behalf and prevailed in the District Court, but the Tenth Cir­cuit reversed that decision on the grounds that failure-to-accommodate liability attaches only when the applicant provides the employer with actual knowledge of his need for an accommodation.

In the now-landmark case, the High Court has ruled that an applicant “need show only that his need for an accommodation was a motivating factor in the employer’s decision, not that the employer had knowledge of his need” in order to prevail in a disparate-treatment or “intentional discrimination” claim.

“I think there is an expectation that companies should have a policy that provides guidance on what should be worn — whether it’s a uniform or, in retail, offering employees a discount on the store’s clothing because you want them to wear it — those kinds of things make sense to the average American,” said Priest. “But when you are infringing upon someone’s ability to express themselves religiously in a reasonable way, I think all of us say ‘something doesn’t seem right.’”

In recent years, American consumers have shown an increased interest in how major companies — in retail and other industries — do business. Whether it’s social responsibility and product sourcing or equal-opportunity employment practices, instances in which big corporations appear to have operated unethically is showing an increased correlation with sales.

Companies with business models that push social causes, such as Toms, Eileen Fisher and Gap, for example, thrive in this more conscious-consumer environment.

“We’re an extremely diverse country,” said Priest. “Whether a company respects those differences and treats its employees with dignity and respect — allowing them to express themselves — that’s going to have an impact on whether people want to shop there.”