(CNN)Seattle Pacific University is under investigation for alleged hiring discrimination, the state attorney general confirmed Friday.
"Seattle Pacific University admits that it refuses to hire gay faculty and staff," Washington State Attorney General Bob Ferguson said in a statement obtained Friday by CNN affiliate KIRO.
Lori Windham, senior counsel at Becket Law, which supports religious liberty and is representing SPU, in a statement accused the state attorney general of "going after a 130-year-old Christian university and violating our country's long-standing principle of the separation of church and state."
"We will defend Seattle Pacific's right to operate its school in accordance with its faith," she added.
In May, students and staff at the private Christian university staged a sit-in and asked for the removal of SPU's board of trustees "after they voted to keep in place school policies that prohibit employees from engaging in 'same-sex sexual activity,'" Ferguson said.
As students walked across the stage during a commencement ceremony the following month, they handed the interim president rainbow pride flags in protest over the school's hiring policy.
Ferguson said his office was contacted by numerous faculty and students to file complaints or express concern about the policy.
In a letter to SPU on June 8, Ferguson notified the university his office was opening an inquiry about the "possible discriminatory employment policies and practices" and asked for additional information.
SPU countered with a federal lawsuit on Wednesday, saying the "attorney general's probe inquires into confidential religious matters and is beyond the scope of authority granted under state law and the federal constitution."
The lawsuit asked a federal judge to declare that the university's religious-based hiring policies are protected by the First Amendment, and to halt the attorney general's investigation permanently.
"The lawsuit demonstrates that the University believes it is above the law to such an extraordinary degree that it is shielded from answering basic questions from my office regarding the University's compliance with state law," Ferguson said in the statement.
In its US District Court complaint, SPU said it responded to Ferguson's letter and sought clarification on the scope of the investigation, but that Ferguson's office dismissed the university's inquiries as "rhetorical questions."
"SPU believes the attorney general's office has targeted the university because of its Christian beliefs and is asking the federal court to ensure it can maintain its religious identity," SPU said in a statement.
"Seattle Pacific University is in federal court defending its right to hire Christian faculty and staff after Washington state's attorney general demanded the university's internal communications and private employee information," the university statement said.
The university lawsuit said it "holds to traditional Christian beliefs regarding marriage and sexuality, in alignment with the Free Methodist Church," and if SPU changed its employment policies to allow Christians in same-sex marriages to be employed, the school would be "automatically disaffiliated from the Free Methodist Church."
Ferguson's statement said his office "respects the religious views of all Washingtonians and the constitutional rights afforded to religious institutions."
"As a person of faith, I share that view," he added. "My office did not prejudge whether Seattle Pacific University's employment policies or its actions are illegal. We responded to the complaints from concerned Washingtonians by sending the University a letter. The letter asked four questions. The letter also invited the University to provide any additional information that it wanted my office to consider."