A court in the German capital, Berlin, has upheld a law preventing a Muslim teacher from wearing a headscarf to work, rejecting her discrimination complaint.
The ruling could still be appealed.
Justice Arne Boyer noted that the teacher had agreed to follow the neutrality law when she was employed.
Such bans are decided on a state level in Germany.
In 2015, the Federal Constitutional Court on appeal struck down a law in North Rhine-Westphalia that prohibit headscarves, but exempted “Christian and Western educational and cultural values or traditions” from its ban.
Germany, a country of 81.8 million people, is home to nearly 4.7 million Muslims, the second largest Muslim population in Western Europe after France.
The European Union’s largest economy has seen in a rise in Islamophobia mainly fueled by far-right politicians and activists, who are against Berlin’s open door policy to the refugees fleeing the Middle East and North Africa conflict zones, many of them Muslims.
New government figures released on Tuesday said German police had recorded 1,075 Islamophobic crimes in 2017.
Far-right activists carried out some 994 attacks against Muslims and mosques, which made up 92.5 percent of all Islamophobic crimes, the report by the Interior Ministry said.