The retailer will now allow hijabs, the traditional head scarves worn by many Muslim women when in public.
One judge determined the company fired a Muslim worker from a California store, while another judge said it refused to hire another woman in the state because of their refusal to remove their hijabs during work.
The rulings came after the U.S. Equal Employment Opportunity Commission filed lawsuits on behalf of both women.
In court papers filed Friday, Abercrombie agreed to pay the women a combined $71,000 and unspecified attorney fees. Additionally, it has established an appeals process for workers who believe they were denied religious accommodations.
"Abercrombie & Fitch does not discriminate based on religion, and we grant reasonable religious accommodations when they are requested," the company said in a statement. "With respect to hijabs, in particular, we determined three years ago to institute policy changes that would allow such headwear."
Source: Agencies