The Business Backlash to North Carolina's LGBT Law

A bill passed this week pits the state Republican Party’s desire to be friendly to business friendliness against its social conservatism.

Demonstrators protest in Raleigh, North Carolina, on Thursday. (Emery P. Dalesio / AP)

When Republicans in North Carolina’s General Assembly decided to pass a law preventing cities from barring LGBT discrimination, creating transgender bathroom accommodation, or enacting minimum wages, they moved quickly. On Monday, they announced a special session. They convened two days later, releasing the legislative language just minutes beforehand. By Wednesday evening, Governor Pat McCrory had signed the bill into law.

The fast pace prevented opponents from rallying against the bill, but it didn’t quell their concerns. The last two days have seen a growing chorus of disapprobation within and outside the state.

The noisier protests come from activists. Hundreds of people rallied outside the legislature on Thursday, and at least five were arrested. Activists planned another demonstration on Friday, using a naughty play on “sit-ins.” “Seeing as our Governor seems so concerned with our bathroom habits we've decided to bring him a little gift,” the organizer wrote. “I've secured a Port O John to be delivered tomorrow to Raleigh and would love have as many people join us as possible as we attempt to give Governor Pat McCrory this important symbol of the work he's done for NC.” A man named J.P. Sheffield, who lives in Georgia, mocked McCrory in a tweet:

Less noisy but perhaps more consequential in political terms are the objections being raised by businesses. Liberal protests against Republican initiatives in Raleigh have been par for the course for four years, with little effect. But the business backlash could sting.

On Wednesday, as the bill was being considered, Dow Chemical, Biogen, and Raleigh-based software company Red Hat all opposed it. Others have since added their voices, including IBM, American Airlines, PayPal, and Apple. (Apple’s CEO, Tim Cook, is openly gay and graduated from Duke University’s Fuqua School of Business.) As my colleague Gillian White reported this week, North Carolina has sought to make itself a hub for tech companies and startups. Democrats in the state say the law could endanger federal Title IX funding for schools.

The NBA, in a statement, suggested it might reconsider plans to host the 2017 All-Star Game in Charlotte. The NCAA also suggested the law might cause it to change plans to hold elements of its annual college-basketball tournament and other events in the Old North State—a move that could resonate in this hoops-crazed state.

These business statements do carry sway in the state—the question is how much. As I’ve written elsewhere, the GOP ended a long period of divided government or Democratic control by marrying the heft of pro-business conservatives who wanted lower taxes and less regulation to social conservatives who oppose things like abortion, LGBT rights, and gun control. Thus far, that coalition has been very successful—the state has passed a remarkable slate of conservative changes. But there are cracks showing in places. Republican legislators have on occasion run roughshod over McCrory, a governor from their own party, overriding his vetoes on things like a previous religious-freedom law. To the horror of pro-business conservatives in the state, North Carolina Republicans voted resoundingly for Donald Trump in the March 15 GOP primary.

Then came the LBGT and transgender bill, which creates a direct collision between pro-business conservatives and social conservatives—and, opponents hope, represents an overreach by the legislature. McCrory, who’s in the pro-business camp, opposed Charlotte’s ordinance but also opposed the special section to override it and wanted a narrower bill. Yet when the bill reached his desk, the governor quickly signed it.

The philosophical problem for McCrory is that it’s hard to paint the state as business-friendly when it’s taking steps that major businesses criticize. But it’s hard to win elections with only the support of pro-business conservatives. This isn’t just a theoretical challenge: McCrory is up for reelection in November, running against Democratic Attorney General Roy Cooper, who opposed the law. In Georgia, business backlash against a religious-freedom bill has threatened to derail it. In North Carolina, the type and scale of backlash could determine whether the law remains or whether legislators revisit it—and it could also determine the future course of the state’s conservative movement.