Posted by Eugene Volokh:
May Jewish Community Center Discriminate Based on Religion?
http://volokh.com/archives/archive_2007_09_23-2007_09_29.shtml#1191020636


   Title VII of the federal Civil Rights Act generally bars employers
   from discriminating based on religion, but exempts religious
   discrimination by any "religious corporation, association, educational
   institution, or society." Those terms, however, aren't precisely
   defined, and while they create plenty of black and white zones,
   there's also a good deal of gray area. [1]Leboon v. Lancaster Jewish
   Community Center Ass'n, a Third Circuit decision filed last week,
   explores this as to a Jewish Community Center; the Center had a
   substantial religious component to its activities, but was not under
   control of any particular synagogue or rabbinical organization. The
   two-judge majority said the Center was a religious organization
   covered by the exemption. One dissenter held the contrary, and would
   have read the statutory exemption as limited to "only those entities
   that ... are controlled by a religious sect."

   Note that there's a separate doctrine, developed under the First
   Amendment, that allows discrimination based not only on religion but
   also race, sex, and the like, but that's limited to ministers and
   other employees with distinctively religious jobs. We're talking here
   about the categorical statutory exemption -- though only from the ban
   on discrimination based on religion -- of all employees of religious
   corporations, associations, educational institutions, or societies.

References

   1. http://www.ca3.uscourts.gov/opinarch/052073p.pdf

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