The U.S. Equal Employment Opportunity Commission has reached a $71,000 settlement with retailer Abercrombie & Fitch Stores Inc. on two lawsuits filed over the issue of an employee and a job applicant wearing the hijab, the Muslim religious head scarf.

In a Sept. 3 ruling, U.S. District Court Judge Yvonne Gonzalez Rogers in San Francisco found New Albany, Ohio-based Abercrombie liable for religious discrimination for terminating a store clerk, Umme-Hani Khan, for wearing her hijab in U.S. Equal Employment Opportunity Commission and Umme-Hani Khan vs. Abercrombie & Fitch Stores Inc., d/b/a/ Hollister Co., Hollister Co. California L.L.C.

In a similar case earlier this year, U.S. District Court Judge Edward J. Davila in San Jose, Calif., refused to dismiss a religious discrimination case brought on behalf of job applicant Halla Banafa, who wore a hijab, in Equal Employment Opportunity Commission vs. Abercrombie & Fitch Stores Inc., d/b/a Abercrombie Kids.

In a consolidated settlement of the two lawsuits announced Monday, Ms. Khan and Ms. Banafa will receive $71,000. In addition, Abercrombie will create an appeals process for denials of religious accommodation requests; inform applicants that accommodations to its “Look Policy,” which prohibits employees from wearing headwear, may be available; and incorporate “headscarf scenarios” into all managers' training, the EEOC said.

The retailer will also be required to make regular reviews of religious accommodation decisions to ensure consistency and provide biannual reports to the agency and Ms. Khan, said the agency.

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A third lawsuit, in which the U.S. District Court in Tulsa, Okla., ruled in July 2011 that it was religious discrimination for Abercrombie not to hire a Muslim applicant for a sales position because of her hijab, is now pending on appeal, the EEOC said.

Commenting on the ruling, EEOC San Francisco regional attorney William R. Tamayo said in a statement, “Our freedom to practice our religious beliefs is a fundamental right in this country. Where reasonable alternatives exist, the law requires employers to be flexible to enable workers to observe their faith and do their job. Employers can't simply reject accommodation requests without concrete proof that the accommodations would cause harm to the business.”

An Abercrombie spokesman could not immediately be reached for comment.