N.C. law blocking LGBT protections cost Charlotte $3.6-million PayPal deal

The online payment company had been planning to open an operations center in Charlotte, bringing 400 jobs to the state. 

Jeff Chiu/ AP/ File
Signage outside PayPal's headquarters in San Jose, Calif., on March 10, 2015. On Tuesday, PayPal said it is canceling plans to bring 400 jobs to North Carolina after lawmakers passed a law that restricts protections for lesbian, gay, bisexual and transgender people.

A North Carolina law stipulating that transgender individuals must use restrooms corresponding to the gender on their birth certificate has convinced online transaction company PayPal to pull out of the city of Charlotte, where it had planned to open an operations center.

The new state law reverses a local ordinance that was more LGBT friendly, and has stripped individuals who identify as lesbian, gay, bisexual, or transgender of certain legal protections. PayPal's leadership has made it clear that it does not support the state's decision.

"The new law perpetuates discrimination and it violates the values and principles that are at the core of PayPal's mission and culture," Paypal CEO Dan Schulman said in a statement.

The planned operations center would have brought four hundred jobs to Charlotte.

Supporters of the new state law say that PayPal should not insert itself into state legislation debates.

"A company with its hands in the pockets of the taxpayers of North Carolina shouldn't insert itself into the bathroom policies of the state," the North Carolina Values Coalition said in a statement. The Coalition also said PayPal did not let human rights violations in Cuba stop its expansion there. 

PayPal is not alone in its reaction to North Carolina's legislation. Over 100 business leaders have called the state law unfair, and say that it may make the state less attractive to skilled workers.

North Carolina Gov. Pat McCrory (R) said that ending local anti-discrimination laws was just "common sense," citing concerns about molestation and assault in public restrooms.

PayPal is just the latest corporation to respond negatively to what liberal executives see as discriminatory legislation. Just days after the legislation was signed in March, major companies and associations including the National Basketball Association, Facebook, and Dow Chemicals had raised objections to the state law.

Facebook, Apple, and Google all have complexes in North Carolina, but unlike PayPal, have not threatened to remove their businesses from the state.

Other states that have contemplated religious liberty laws, including nearby Georgia, have prompted similar reactions from large companies.

The popular AMC show "The Walking Dead" is filmed in Georgia. Its producers have threatened to leave the state if Gov. Nathan Deal (R) signed a bill that would allow business owners with "sincere religious beliefs" to refuse service to LGBT individuals. Governor Deal ultimately vetoed the bill.

A religious freedom law signed by Indiana Governor Mike Pence (R) last year cost the state about $60 million in tourist and convention revenue.

"Both Georgia and North Carolina have marketed themselves as being good for business," Emory University professor Tim Holbrook wrote for CNN. "Indiana apparently was not a big enough canary in the coal mine."

This report contains material from the Associated Press and Reuters.

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