Corporations expressed disappointment and the NCAA vowed to monitor what North Carolina does next now that the state has banned any local government measures protecting people from discrimination on the basis of sexual orientation and gender identity.
American Airlines, which operates its second-largest hub in Charlotte; IBM and Biogen, which have facilities in the state's Research Triangle; and payments processor PayPal, which had announced plans to hire 400 people in Charlotte only last week, were among major employers condemning the new law.
Many similar bills are being considered in state legislatures, but North Carolina is the first in the nation to require public school and university students to use only those bathrooms that match their birth certificates, according to the National Conference on State Legislatures.
The state law "is a clear step backwards. Sad day," tweeted Jim Whitehurst, chief executive of Raleigh-based open-source software company Red Hat.
The economic impact will take time to quantify. There were no immediate threats to withdraw business from the state, which has seen booming growth and an influx of "knowledge workers" in Charlotte and Raleigh, even as rural towns lag behind economically.
Democrats warned that North Carolina risks losing billions in federal education dollars by conflicting with Title IX anti-discrimination regulations that apply in public schools.
The NCAA, which is scheduled to hold men's basketball tournament games in Greensboro in 2017 and Charlotte in 2018, said it takes diversity into account when it chooses its event sites.
"Our commitment to the fair treatment of all individuals, regardless of sexual orientation or gender identity, has not changed," the organization's statement said. "It is our expectation that all people will be welcomed and treated with respect in cities that host our NCAA championships and events."
The Legislature called a special session to void the Charlotte ordinance, which would have enabled transgender people to legally use restrooms aligned with their gender identity, and would have provided broad protections against discrimination in public accommodations in the state's largest city.
The new law now prevents the state's cities and counties from passing their own anti-discrimination rules, and instead imposes a statewide standard that leaves out sexual orientation and gender identity.
Republican Gov. Pat McCrory had urged the GOP-led legislature to give him a bill that solely addressed bathrooms, but he signed it anyway late Wednesday, even after lawmakers added other limits on local governments – most notably, prohibiting cities and counties from requiring businesses to pay more than the state's minimum wage, currently $7.25 an hour.
Supporters say the new law protects all people from having to share bathrooms with people who make them feel unsafe. Advocates for gay, lesbian, bisexual, and transgender rights say it demonizes them with bogus claims about bathroom risks.
"The disappointment, anger and fear many are feeling today is beyond words. What's worse is this will likely not be our last defeat," Human Rights Campaign President Chad Griffin wrote in an online column Thursday.
Bathroom use has proved to be a potent wedge issue around the country since Houston's anti-discrimination law was overwhelmingly voted down in a referendum last year, but LGBT advocates have had some victories, too. South Dakota's legislature failed to override Gov. Dennis Daugaard's veto of a bill requiring students to use bathrooms corresponding to their birth gender, and a similar bill in Tennessee bill died Tuesday.
The specter of shared public bathrooms also was raised as a warning two generations ago when states were considering a constitutional amendment to enshrine women's rights, said Katherine Franke, a Columbia university law professor and director of the school's Gender and Sexuality Law center.
The LGBT movement won't likely table the bathroom issue to focus on other areas of discrimination, Franke said.
"The issues of discrimination and violence against transgender people in the context of bathrooms are so overwhelming, that to them it is a cutting-edge problem," she said. "Overwhelmingly it's transgender people who are the victims of violence in the bathroom setting. ... This is a basic human need."
Instead, advocates will likely try to win more acceptance from society about transgender people and their particular challenges, Levasseur said. "The LGBT movement is right now focusing its efforts on educating people about who transgender people are, and that is the antidote to this battle," Levasseur said.
The issue won't likely go away as North Carolina's Democratic Attorney General, Roy Cooper, tries to unseat McCrory in November. Republicans see the law as protecting business owners who have a religious objection to gays and lesbians, and political differences with liberal local governments. Democrats see the law as proof that the GOP won't protect minorities.
That rile up the rank-and-file of both parties, but it's corporate America that could tip the scale, said Michael Bitzer, political science professor at Catawba College in Salisbury, northeast of Charlotte.
"If businesses are starting to look at North Carolina and says this is not the environment we want to be in, that could have some blowback, and McCrory would be in the bulls-eye," Mr. Bitzer said.