Federal law says you must accommodate employees' religious practices or beliefs unless doing so would cause an undue hardship on the employer.
The key question: What's considered an "undue hardship" that would allow you to refuse an accommodation? The EEOC says it's an accommodation that "requires more than ordinary administrative costs, diminishes efficiency in other jobs, infringes on other employees' job rights or benefits, impairs, causes co-workers to carry the accommodated employee's share of potentially hazardous or burdensome work, or if the proposed accommodation conflicts with another law or regulation."
As the following case proves, as long as certain religious-based moral behaviors don't affect job performance, they likely won't rise to the level of undue hardship.
Recent case: Mike Kolman, a sales director for an aircraft maker, complained to HR that his supervisor inferred that his Mormon religion was a hindrance to his ability to sell the company's business jets. Specifically, the supervisor said customers would be offended by Kolman's refusal to drink or smoke and be "one of the boys" during business dinners.
Shortly after voicing his complaints, Kolman was fired. He filed a complaint with the EEOC, which sued for religious discrimination on his behalf. The company denied the charges, but agreed to settle the case, giving Kolman $159,000 and a positive reference letter. The company must also train employees on religious discrimination. (EEOC v. Bombardier Aerospace Corp., No. 3:03-CV-1904, N.D., Texas, 2005)
Online resource: For more advice on religious accommodations, go to www.eeoc.gov/types/religion.html.