SEVERSON: Arnold's garage is only a tiny example of faith in the workplace. More and more larger companies, including some in the FORTUNE 500, are now allowing employee prayer groups. Companies like Pepsi, Coca-Cola, Ford, Intel, Texas Instruments, and Sears. And fast-food chain Chick Filet closes on Sunday so workers can worship.

Faith in the workplace is also spreading in medium-sized firms, like Preferred Management, a home health care company in Indianapolis.

JACKIE STEUERWALD (Founder and CEO, Preferred Management) (During Monday Prayer Group): May we hide this word in our heart and not sin against you, in Jesus' name. Amen.

SEVERSON: Preferred Management has almost 200 employees, devotions every Monday, two chaplains, and reminders everywhere that this is a faith-based company. Jackie Steuerwald is the founder and CEO.

Ms. STEUERWALD: Well, I believe as Christians, our responsibility, according to the Lord, is to advance the Kingdom of God. And so we're promoting truth and righteousness. And that's everywhere we go, that's what we promote.

SEVERSON: Chaplain Sherry Proffitt, who counsels clients and employees, says inquiring about a potential employee's religious affiliation is illegal, but it's unlikely there are any non-Christian employees at Preferred.

Chaplain SHERRY PROFFITT (Preferred Management): Most of the people who come in and apply for this job see our logo. Most of them know we are a Christian company. So it's kind of the same. You wouldn't apply to a Spanish-speaking company unless you spoke Spanish.

SEVERSON: The company's chain-of-command chart shows all department heads reporting to Jesus. The ever-present display of Christianity didn't seem to bother the employees we spoke with. This is Diane Pinkins, a new employee.

DIANE PINKINS (Employee, Preferred Management): It's been refreshing to work for a company that puts their Christianity out there, that really prides itself on its ethics.

SEVERSON: But some employees found Preferred more oppressive than refreshing. Diana Dewester, a Catholic, was a branch manager, who, along with seven other former employees, joined in a complaint of religious discrimination against Preferred filed with the Equal Employment Opportunity Commission, the EEOC.

DIANA DEWESTER (Former Employee, Preferred Management): We were required as managers to preach to our employees; to require our employees to abide by Preferred CEO's religious beliefs. I had told Jackie one day that I didn't believe Christians had the corner on the God market. I want to tell you that I really got laid out for that. My job was threatened.

SEVERSON: The EEOC has seen a 30 percent increase in religious discrimination complaints of various kinds since the year 2000.

Ms. STEUERWALD: We were taken to court for this. We were found not guilty for discrimination, but what we were found guilty of was harassment.

SEVERSON: Jackie said that the whole thing with the EEOC and the employees was about poor job performance.

Ms. DEWESTER: No, that's not true. No, that's not true. And she knows that's not true.

Ms. STEUERWALD: What I have learned is that people either accept Christ or who he says he is, or they oppose him for who he says he is. And actually, the Scripture says that, "To God, we are the aroma of Christ. And to those who are being saved, we are the fragrance of life. But to those who are perishing, we are the smell of death."

Chaplain PROFFITT: I'm the chaplain and I think some people overstep their bounds a little bit. And I also think we've had some disgruntled employees.

SEVERSON: Professor Nash says companies need to guard against creating religious boundaries.

Prof. NASH: I think there's a great concern that there will be more intolerance, the more religion intrudes on the workplace. And that's a reasonable fear. Often religious expression has been about membership and about agreeing about certain beliefs and forms of worship, and you are either in or you are out.

SEVERSON: Chaplain Sherry Profitt says Preferred is now more sensitive and cautious not to foist religion on its employees.

(To Fletcher Arnold): Do you ever have any of your employees who object to the fact there is so much religion here?

Mr. ARNOLD: No, I had a few who thought I was a little loose. I tell you, that's the truth. You know what I mean?

SEVERSON: Arnold says he's not really certain if his Christianity has helped his business. But, having run a successful business for 40 years, he must have been doing something righteous. For RELIGION & ETHICS NEWSWEEKLY, I'm Lucky Severson in Baltimore.