How is this even a question?
Did I miss something about Kimberly Cloutier having a gun pointed to her head and being forced to work at Costco? If she doesn't like their dress code she has precisely three options:
1. Remove the jewelry.
2. Find another job.
3. Open her own store and employ whatever freaks she wants to. She can even make a dress code that *requires* her employees to look like idiots, and if they don't like it, then they can go work at Costco instead.
Freedom is a two-way street. Ms. Cloutier has the freedom to mutilate herself any way she wishes, and Costco has the freedom to hire and fire anyone it wishes. With freedom comes responsibility: you are responsible for the consequences of the actions you have the freedom to take. If you decide to turn yourself into a walking pincushion, don't be surprised when you hear, "Don't call us; we'll call you" over and over again.
The claim that she is exempt because she's a member of the Church of Body Modification is laughably absurd. My membership in the Church of the Flying Spaghetti Monster isn't going to win me any religious discrimination lawsuits, and it's got a whole lot more than 1000 members. What next--a church that believes an invisible man in the sky knocked up a virgin and then let his illegitimate son be killed because everyone on the planet is a sinner? (Actually, that one would probably be pretty popular; you can find a crackpot who will believe anything these days.)
