The US Navy may have violated federal law for relieving a Navy chaplain of duties because he observed his religious beliefs, a religious rights group claims.

According to religious rights group Liberty Institute, the US Navy violated federal law when it forced Navy Chaplain Wes Modder to choose between practising his faith or be terminated from military service.

The group cited military regulations detailing how Navy chaplains are not required to compromise the standards of the religious organisation they belong to; and can offer care in line with their pastoral identity.  

Liberty Institute, which represents Modder in the case, also told Charisma Newsthat the Navy's decision was based on an outdated set of rules that have since been replaced by new regulations passed by the US Department of Defence in 2014.

Modder came under fire in February when a gay officer in the Navy, who was offended by Modder's beliefs regarding homosexuality, wrote a five-page complaint against the chaplain after Modder questioned issues of homosexuality and premarital sex in private counselling sessions.

The gay officer was assigned to Modder as an assistant for a month. His complaint also alleged that the chaplain had berated a student during private sessions for engaging in premarital sex.

In response, the Navy then relieved Modder of his duties as chaplain and reassigned away him from the Naval Nuclear Power Training command, CBN News reported.

Modder applied for religious accommodation, claiming that he was targeted because of his religious beliefs. However, his request was denied by the US Navy on Tuesday, the Christian Post reported.

He is now awaiting the outcome of the military's investigation.

According to CBN News, he could be brought before a Naval board of inquiry and possibly fired just months before he reaches 20 years of service, after which he could retire.