"In this case, both parties agree that the 'de minimis' test is not right, but they differ slightly in the alternative language they prefer," wrote Alito.

"What matters more than a favored synonym for 'undue hardship' (which is the actual text) is that courts must apply the test in a manner that takes into account all relevant factors in the case at hand, including the particular accommodations at issue and their practical impact in light of the nature, 'size and operating cost of [an] employer,'" he continued.

Alito said courts were wrong to apply a trifling standard for undue hardship because a "hardship" means "something hard to bear," according to dictionary definitions.

The court ultimately revived a Title VII lawsuit brought against the postal service by former USPS employee and Evangelical Christian Gerald Groff, who sought not to work on the Sabbath. USPS offered to arrange for employees to swap shifts with Groff on Sundays but was often unable to find anyone.

Groff eventually resigned after allegedly being disciplined for not showing up on those days.

The U.S. Court of Appeals for the Third Circuit sided with the government last year in holding that Groff's absences "imposed on his coworkers, disrupted the workplace and workflow, and diminished employee morale" at the local post office."

Dawn Solowey, a partner at Seyfarth Shaw, called the ruling significant in that it clarifies the test for determining whether an accommodation's impact on co-workers would constitute an undue hardship that would bar a lawsuit, what she called a "murky area" of the law.

The court said employers must show not only that the request impacts other employees, but that the effect on co-workers changes the conduct of business. The justices also noted that an accommodation that forces co-workers to work overtime does not, by itself, constitute undue hardship.

"Groff adopts a more rigorous approach, requiring not only a showing of impact on co-workers but a showing that the impact actually affects the conduct of the business," Solowey said. "This is important with respect to things like employees seeking time off for Sabbath observance and employees requesting prayer breaks, among others."

She said she expects more religious accommodation lawsuits from the plaintiffs bar and religious rights groups in the wake of the opinion, but much remains up in the air.

"We will need to see over time how the lower courts interpret Groff's 'substantial costs' standard, and whether and how EEOC updates its guidance in the wake of this decision," Solowey said, referring to the U.S. Equal Employment Opportunity Commission.

In an alert on the firm's website Thursday, Shawe Rosenthal attorneys Fiona Ong and Elizabeth Torphy-Donzella said employers should review their current practices for considering religious accommodations and take a new look at pending requests in light of the court's decision.

"The need to demonstrate a substantial burden before denying an accommodation is a significant change but does not place employers in 'unfamiliar territory,'" they wrote. "As with analysis under the ADA, inconvenience to other employees is not dispositive and costs of granting the accommodation must be considered in light of the size of the employer and its overall resources, financial and otherwise."

The court said did not adopt the standard laid out by Americans with Disabilities Act case law, as Groff suggested, or in the EEOC's guidance constructed from Hardison, as the U.S. government asked. 

"Both of these suggestions go too far. We have no reservations in saying that a good deal of the EEOC's guidance in this area is sensible and will, in all likelihood, be unaffected by our clarifying decision today," Alito wrote. "But it would not be prudent to ratify in toto a body of EEOC interpretation that has not had the benefit of the clarification we adopt today."

Paul Starkman, a Clark Hill employment attorney, said since the new "substantial increased costs" standard differs from the "significant difficulty or expense" standard in the ADA, it is unclear what — if anything — employers will have to do differently when facing requests to accommodate religious beliefs as opposed to requests to accommodate disabilities.

Justice Sonia Sotomayor stated in a concurring opinion that "undue hardship on the conduct of a business may include undue hardship on the business's employees."

"There is no basis in the text of the statute, let alone in economics or common sense, to conclude otherwise," Sotomayor wrote in the concurrence joined by Justice Ketanji Brown Jackson. "Indeed, for many businesses, labor is more important for the conduct of the business than any other factor."

Aaron Streett, a Baker Botts partner, argued for Groff. The government was represented by U.S. Solicitor General Elizabeth Prelogar.

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"This is an important victory for Americans of all faiths, who may now follow their religious consciences in the workplace," Streett said in a statement. "It is especially gratifying that the court was unanimous in interpreting the Civil Rights Act according to its plain language, holding that employers must accommodate religious practices absent an 'undue hardship' on the 'conduct of the business.'"

The Supreme Court rendered its decision in Groff v. Louis DeJoy, Postmaster General.