By an 8-1 vote, the high court sided with the Equal Employment Opportunity Commission (EEOC), a federal government agency that sued Abercrombie on behalf of Samantha Elauf, on the grounds she was discriminated against because of the firm's dress code.
The clothing company is known for populating its stores with male and female staff in somewhat racy attire.
Its salespeople are required to conform to "Abercrombie style," defined as a "classic East Coast collegiate style."
Any departure from the dress code is regarded as grounds for disciplinary action, including dismissal, on the basis that it can negatively impact the company's image, brand and sales.
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Attorneys arguing Elauf's case said she was protected by the 1964 Civil Rights Act, which bars anyone from being refused employment based on their religion, unless the employer cannot accommodate the person's religious beliefs without adversely affecting business.
Abercrombie is fighting the case, arguing that Elauf did not specifically request an exemption from the company's dress code on religious grounds.
Given that Abercrombie's dress code did not apply to job interviews, the company had presumed that Elauf would wear the scarf each day at work if hired, Justice Samuel Alito has said previously.
Elauf was awarded USD 20,000 in damages at an earlier hearing before the case was dismissed on appeal.