I think it's really fascinating that in six pages of "sue / don't sue / be pissed / go along with it" discussion, not one person has asked whether she sat down with her boss and DISCUSSED the problem. I don't mean in the moment when she was told to cover it up; I mean after she has had a chance to process the information and come back to discuss why she thinks his request is unreasonable. Here's what I think is one of our major problems in this country. We are so ready to be offended by everything and that brings about our readiness to sue sue sue (well, that and greed). More than likely, some ignorant ass was offended by this tattoo and complained, so the boss makes a rash decision and acts on the perceived offense and now we advise the girl to be offended and sue. Yes, she is being discriminated against and should not just accept it and go along because she is not in the majority. But is there not a better response than suing or marching immediately to the labor board?
Maybe this whole thing could be resolved with a sit-down discussion where the girl explains why she feels she is being unfairly singled out and tries to come to a reasonable solution. Maybe the guy hasn't even considered the fact that he has just discriminated against one of his employees. I mean, hell, the boss did hire her and obviously did not seem to have a problem with it initially. That indicates that he is at least a somewhat reasonable person. Maybe he just needs to be educated about what the tat signifies and why it is important to the girl. And if this is coming from another employee, then maybe he needs to be gently reminded that he cannot gold one employee to a different set of standards than any other employee. It's entirely possible that the boss just reacted to a complaint without really thinking it through. Believe me, people do this ALL THE TIME.
In the end, I don't think she should stand for or back down against discrimination, and if the boss refuses to do the right thing, then she has every right and possibly even a responsibility to stand up, but don't just jump there right away. Talk to the dude.