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Hollister sales associate Umme-Hani Khan thought she was doing everything right: She wore flip-flops and long-sleeved shirts and jeans she bought at the trendy clothing store, and the hijabs, or headscarves, she wore matched company colors.
But four months into her job, in February 2010, a district manager spotted her at the store where she worked in San Mateo County, just south of San Francisco, and asked her to remove her hijab.
Khan, a 19-year-old who worked part-time in the stockroom, refused, citing her Muslim faith. Within two weeks, the district manager and the head of corporate human relations at Abercrombie & Fitch, Hollister's parent company, agreed Khan should be fired for violating the company's "Look Policy," which bans headwear.
Now a federal judge says that Abercrombie & Fitch owes Khan damages. U.S. District Court Judge Yvonne Gonzalez-Rogers wrote that "reasonable jurors could determine that by offering Khan one option – to remove her hijab despite her religious beliefs – Abercrombie acted with malice, reckless indifference…"
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Abercrombie has long been criticized for its hiring practices, often for favoring more attractive job applicants who fit the retailer's young, preppy look. When Khan's case landed with the Equal Employment Opportunity Commission, a federal office that oversees employee rights, attorneys there were already working on two similar cases involving Abercrombie.
In both cases, one out of Tulsa, Okla., the other out of Northern California, the EEOC claimed that Abercrombie refused to hire two women because they wore hijabs.
Abercrombie said in a statement to NBCNews.com on Tuesday that it does not discriminate based on religion and that the company grants "religious accommodations when reasonable." The company would not comment further, saying it does not discuss pending cases.
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William Tamayo, the regional attorney for the EEOC who oversaw Khan's case, said Abercrombie is contradicting itself.
"The employer will say that they don't discriminate, but their filing says, 'We have the right to discriminate,' " Tamayo said. "They're working on fears and stereotypes and the belief that customers and women who are Muslim are going to hurt sales negatively."
Before taking the case to court, the EEOC approached Abercrombie about changing its "Look Policy," but Tamayo said those talks stalled.
According to court records, Abercrombie rejected a deal because the EEOC wanted "all employees to be allowed to wear headscarves in the future and did not permit consideration on a case-by-case basis."
Abercrombie said in court records that store associates "reinforce the aspirational lifestyles represented by the brands," and that they are "a central element in creating the atmosphere of the stores."
Abercrombie argued to the court that store associates should be classified as "living advertisements," and that their appearance is protected by commercial speech.
Judge Rogers found that argument wanting, noting that employees may wear other brands.
The judge also noted that Khan had interviewed wearing a headscarf and that her job was to fold clothes in the stockroom, where she wasn't visible to customers. In the four months that she worked at Hollister before the district manager spotted her, she was on the floor just one to four times a shift.
Finally, the judge said, no customers had complained, and Abercrombie couldn't show that Khan's hijab had hurt sales.
But Rob Frankel, a brand consultant in Los Angeles, said Abercrombie should be allowed to demand that employees stick to a dress code.
"If I tell you, 'No burkas, no yarmulkes,' I'm not suppressing your rights; I'm creating brand consistency," Frankel said.
Frankel, who has never consulted for Abercrombie, said the company has been lagging of late. He said that if the retailer were to approach him about branding, he would tell them their product needs an overhaul: "I would tell them that their light is fading fast, and they better change fast."
Khan's case heads to trial later to determine what damages Abercrombie owes her.
—By Isolde Raftery of NBC News