In the case of Estate of Thornton et al. v. Caldor, Inc., 1984, the U.S Supreme Court ruled that a Connecticut law which required employers to honor their employees' Sabbath observance was unconstitutional as it violated the Establishment Clause of the First Amendment. The court held that this law advanced a particular religious practice and thus constituted an impermissible state endorsement of religion. Donald E. Thornton had been fired from his job at Caldor for refusing to work on Sundays due to his religious beliefs as a Presbyterian Christian; he then sued under this Connecticut statute requiring accommodation for Sabbath observers in employment situations without undue hardship on business operations or other employees’ rights and benefits. However, by ruling in favor of Caldor Inc., the Supreme Court found that such laws unduly interfered with businesses' ability to manage their own affairs while also privileging one set of religious practices over others.

In the dissenting opinion for Estate of Thornton v. Caldor, Inc., Justice O'Connor argued that Connecticut's law did not violate the Establishment Clause because it was a neutral law of general applicability designed to protect employees' rights to religious observance. She contended that this case differed from those where laws were passed with an intent to promote religion or had a primary effect of advancing religion. Instead, she saw the statute as one among many labor laws protecting employee rights and promoting social welfare objectives such as health and safety regulations or minimum wage requirements. Furthermore, she disagreed with the majority’s view that providing absolute deference to an employee's Sabbath observance would impose significant burdens on employers; instead arguing that any burden imposed by accommodating religious practices is part of doing business in our diverse society.