Should Christian legal groups on campus be able to ban anyone who has sex with someone of the same gender?

Washington Post:

The Christian Legal Society at the University of California's Hastings College of the Law in San Francisco several years ago began requiring its members to sign a statement of faith. The society says a person who "advocates or unrepentantly engages in sexual conduct outside of a marriage between a man and a woman" cannot become a member of the group and participate in setting its policies.

The university then refused it official status, meaning it was ineligible for such perks as meeting space or a cut of the school's student activities fee. The university said the society was the first group to refuse to abide with its policy that organizations "not discriminate unlawfully on the basis of race, color, religion, national origin, ancestry, disability, age, sex or sexual orientation."

It's an interesting question since they're not operating a church on some street corner, independent of everything else. They're opening their society in a university setting, funded by some of the very students they want to exclude. Whether or not they have the "religious right" to ban whomever they want, in a university setting there are other rights as well - the university bans discrimination based on sexual orientation. So you have two rights directly in conflict. What's the solution?