Yes. Religious institutions are allowed to discriminate based on religion. This is one of those things that makes total sense if you give it some thought. It would be pretty unconstitutional to force a religious group to employ people who are opposed to their religion.
" Are there any exceptions to who is covered by Title VII’s religion provisions?
Yes. While Title VII’s jurisdictional rules apply to all religious discrimination claims under the statute, see EEOC Compliance Manual, “Threshold Issues,” www.eeoc.gov/policy/docs/threshold.html, specially-defined “religious organizations” and “religious educational institutions” are exempt from certain religious discrimination provisions, and a “ministerial exception” bars Title VII claims by employees who serve in clergy roles.
Religious Organization Exception: Under Title VII, religious organizations are permitted to give employment preference to members of their own religion. The exception applies only to those institutions whose “purpose and character are primarily religious.” Factors to consider that would indicate whether an entity is religious include: whether its articles of incorporation state a religious purpose; whether its day-to-day operations are religious (e.g., are the services the entity performs, the product it produces, or the educational curriculum it provides directed toward propagation of the religion?); whether it is not-for-profit; and whether it affiliated with, or supported by, a church or other religious organization.
This exception is not limited to religious activities of the organization. However, it only allows religious organizations to prefer to employ individuals who share their religion. The exception does not allow religious organizations otherwise to discriminate in employment on the basis of race, color, national origin, sex, age, or disability. Thus, a religious organization is not permitted to engage in racially discriminatory hiring by asserting that a tenet of its religious beliefs is not associating with people of other races."
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