Suppose a religious group receives some federal mammon to fund their good works. Pregnancy counseling, say, or a homeless shelter. Or job training. If the group uses paid employees in that good work, should it be able to hire exclusively from within the faith?
I don’t know how open the Church is to recieving federal money in its charitable work. Not very, I bet. But the Church does have a strong interest in seeing that churches taking account of religion in their hiring doesn’t come to be seen as just another form of invidious ‘discrimination’.