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Melissa Klein, co-owner of Sweet Cakes by Melissa in Gresham, serves a customer in 2013.

(Everton Bailey Jr./The Oregonian)

State labor investigators have determined a Gresham bakery violated the civil rights of a same-sex couple when it refused to make a cake for the women's wedding.

The Bureau of Labor and Industries said Friday that it has wrapped up its investigation into Sweet Cakes by Melissa. Spokesman Charlie Burr said investigators found substantial evidence the bakery unlawfully discriminated against the couple based on their sexual orientation.

Oregon law bans discrimination against gay, lesbian, bisexual and transgender people in jobs and in places that serve the public, such as restaurants and bakeries.

The controversial case began a year ago. Rachel Cryer and Laurel Bowman of Portland say they were denied a wedding cake by the bakery's owners, who cited their own religious beliefs. Cryer and Bowman, who are domestic partners, soon lodged a complaint with the state.

The state will now oversee a conciliation process between the two parties to see if a settlement can be reached. If not, the labor bureau may pursue charges before an administrative law judge.

Paul Thompson, the Portland attorney representing Cryer and Bowman, said the women consider the investigation’s findings bittersweet. He said the two are about as pleased as they can be, given that state investigation ultimately determined they were discriminated against.

Herbert Grey, the Beaverton attorney representing bakery owners Aaron and Melissa Klein, said the investigation’s outcome was expected. He said the Kleins will participate in the conciliation process, but are maintaining their original stance.

The Kleins have contended they weren't discriminating against the couple, who were customers in the past. Instead, they say they were practicing their Constitutional right to religious freedom. They have said baking a cake for a same-sex wedding would violate their Christian beliefs.

A post on the business’ Facebook page about the investigation’s findings had attracted nearly 200 comments late Friday, most in support of the owners’ stance.

"They’re being punished by the state of Oregon for refusing to participate in an event that the state of Oregon does not recognize," Grey said.

In the months after the case unfolded, Sweet Cakes by Melissa closed up shop on the edge of downtown Gresham, and the Kleins moved the business to their home.

-- Molly Young

Update, 5:50 p.m.: Adds comments from lawyers representing both parties in the case.