The Gap Inc. (annual sales $14 Billion) has advised its employees to wish customers Happy Holidays rather than Merry Christmas representing the latest in a trend to "secularize" Christmas. How should Jewish employers, employees and neighbours deal with the holiday season?
The abhorrence of Judaism for idolatry is such that Jewish law prohibits even the mentioning the name of an idol. Monotheism is so central to world order that even non- Jews are proscribed from engaging in idolatrous practices. Thus Jewish law has codified a series of laws that forbid "strengthening the hands of idolaters". Restrictions are placed on commercial activities with those for whom there is reason to fear that said profits will be used for idolatrous practices. And while many authorities assume that for non-Jews Christianity is not to be deemed idolatrous, there is no doubt that a Jew must (as unfortunately so many have over the years) forfeit one's life rather than convert to Christianity.
Our abhorrence of idolatry is manifest only in terms of religious ideology and at times commercial practice. In the area of personal interaction, Jews are obligated to treat all of humanity - notwithstanding any practices that may be repugnant - with dignity, honesty and respect. Thus the Talmud praises Rav Yochanan ben Zachai - the Rabbinic leader who literally saved Judaism during the Roman conquest of Jerusalem - for his practice of eagerly greeting the s of his days. Furthermore Jewish law states that one must feed the hungry, visit the sick and bury the dead of such idolaters. All of humanity is created in the image of G-d and are thus worthy of being treated in a dignified matter regardless of ones' belief system. Furthermore we must avoid any practice that may cause friction with our fellow citizens. And this would include not "celebrating" the festivals with our non-Jewish neighbours. Rav Moshe Isserles in his glosses to the the Shulchan Aruch (standard code of Jewish law written in the 16th century by Rav Yosef Karo, a victim of the Spanish expulsion) rules that if non-Jews are celebrating even a religious festival, Jews must join in the celebrations lest tension be created. It seems obvious that participation in the office holiday party - which today has little if any religious flavour to say the least - is a must for the modern day employee. Similarly the Shulchan Aruch permits (encourages?) the sending of gifts to non Jewish acquaintances during their festival season. Such displays of friendship strengthen the social standing of the Jew vis a vis the non Jew something of great import when living in exile. We are even allowed to wish our non Jewish brethren well as they celebrate their religious festivals. Blessings such as may G-d bless you are specifically mentioned as appropriate, knowing full well that the non-jew interpretation of god certainly differs from ours.
However invoking Merry Christmas may be a different matter, one that is dependant on the meaning and usage of the word Christmas. Halacha permits invoking the names of festivals of other religions provided that the name of a foreign deity is not mentioned. Thus it would be permissible to say happy easter or happy new year. Assuming that Christ is the name of a deity then its mention would proscribed by Jewish law. However the term Christ actually derives from the Greek Christos, meaning anointed one or messiah. Thus strictly speaking it usage should be permitted and perhaps at times even encouraged, such as when interacting with observant Catholics if failure to do so would create conflict.
Of course it is most natural considering the historical interaction between Jews and Christians, that for many Jews saying such words are extremely difficult and painful. A neutral expression such as season's greetings or happy holidays, especially in our multi cultural society would thus be appropriate in most circumstances. Of course there is no reason why Christians should not greet their co-religionists using Merry Christmas.
While acknowledging Christmas vis a vis our neighbours is most appropriate such is not the case when dealing amongst ourselves. In a somewhat cryptic response Rav Moshe Feinstein rules that one should not make a simcha on a non Jewish festival unless it is an obligatory feast such as a brit milah or pidyon haben. May we merit the day "when the earth will be filled with the knowledge of G-d as the water covers the sea" (Isiah 11:9).