The 'religious element' is inherent in the nature of the case when the defendant is a church. Not a cult, but a centuries-old, relatively 'liberal' Protestant church, at that. Cheryl Perich, the plaintiff, argues that the church violated various civil right-based laws and rules by replacing her after she had been effectively ordained ('called', in Lutheran church parlance) to be a minister. Unfortunately, due to Perich's apparently temporary inability to perform her teaching duties (narcolepsy) she was replaced as a teacher and, later, no longer afflicted with narcolepsy she was not able to regain her position (which had already been filled) so, she sued.
When she sued the church (her former employer) she violated church orthodoxy and was, in effect, relieved of her ministerial status as well as her job. Churches should be able to maintain this authority to select or dismiss those they employ on the basis of their adherence (or refusal to adhere) to the church's traditional code of conduct. In this case, as in many Protestant churches, filing a lawsuit against the church in the secular courts was grounds for the woman's dismissal from her ministerial position. I maintain that if a mainline, Protestant church cannot choose it's teachers and ministers without government intervention, religious freedom is lost.
The Missouri Synod Lutherans I know are among the most conservative people I know. It's the ELCA's that are liberals. Not that it matters in this case.
Nice to see your knowledge is on par with the DOJ, albeit in different areas.