Religious Discrimination in Head Start Programs

I found this article and thought that it was interesting that a government/taxpayer funded organization, that is run by a religious organization, was allowed to discriminate against employees based on their religion! At least, that is my understanding; please tell me if I'm confused about the issue. Also, since this article was written in 2005, it would be interesting to hear what the outcome was...please let me know if you find anything. :)