PayPal has withdrawn plans for a new Charlotte operations center because it opposes North Carolina’s new law that limits the legal protections of LGBT individuals, the most dramatic display yet of corporate opposition to House Bill 2 and one that will cost the city more than 400 jobs.
The payment processor’s move Tuesday led to renewed calls for Gov. Pat McCrory and the state legislature to overturn a law passed last month that has drawn criticism from big companies such as Bank of America and American Airlines as well as sports organizations such as the NBA.
N.C. Attorney General Roy Cooper called on McCrory, his opponent in this November’s gubernatorial race, to repeal the legislation, which was passed in response to a Charlotte non-discrimination ordinance.
“The threat that HB 2 poses to jobs and our economy is no longer a possibility, it’s a reality,” Cooper, a Democrat, said in a statement. “These are new, better paying jobs North Carolina won’t get because Governor McCrory has put his political ideology above all else. It’s time to reverse course and take actions to undo the damage.”
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North Carolina’s new law, signed March 23 by McCrory, limits legal protections of LGBT individuals by setting a statewide definition of protected classes of citizens. The new law means schools and local governments cannot adopt more inclusive rules. Legislative leaders said they were responding to Charlotte’s expanded nondiscrimination ordinance that would have allowed transgender people to use the bathroom that corresponds to the gender with which they identify.
Sen. Jeff Tarte, a Cornelius Republican who voted for HB 2, said the state “can’t ignore” the PayPal decision.
“We need to be listening when these businesses have these kind of concerns,” he said. “We need to get around the table and understand what their real concerns are.”
Tarte said there may be some room to change the law, to a point. “I don’t want men in girls’ showers. That’s not negotiable … And Charlotte’s ordinance would allow that to happen.”
PayPal project drew McCrory’s praise
PayPal, a San Jose, Calif.-based payments company, last month announced plans for a new global operations center in Charlotte that would employ about 400 people. The company’s CEO, Dan Schulman, however, later became one of more than 100 CEOs to signal their opposition to HB2 in an open letter.
“The new law perpetuates discrimination and it violates the values and principles that are at the core of PayPal’s mission and culture. As a result, PayPal will not move forward with our planned expansion into Charlotte,” Schulman said in a statement Tuesday.
Schulman’s announcement came just three weeks after PayPal executives gathered with state leaders at the Charlotte Chamber to hold a triumphant announcement of the new operations center. McCrory said PayPal was the kind of technologically advanced company North Carolina and Charlotte need to attract.
“Young people know all about it,” McCrory said March 18 of the online payments platform. He presented PayPal executive John McCabe with a wooden bowl bowl made by an artist from a tree struck by lightning outside the state capitol to commemorate the occasion. “Charlotte continues to be a great job-creation center.”
The company had planned to open its office at 1000 Louis Rose Place, off Research Drive in the University City area. PayPal said the jobs would have an average salary of nearly $51,000 a year, and the company committed to invest $3.6 million in its new facility.
We’re extremely disappointed. That’s 400 jobs that were coming to our area that are no longer coming.
Darlene Heater, executive director of University City Partners.
Schulman said the company is now seeking an alternative location for the operations center. Last month, PayPal had said Arizona and Florida were in the running against Charlotte.
Paypal is also working, Schulman said, “to overturn this discriminatory legislation.”
“We will stand firm in our commitment to equality and inclusion and our conviction that we can make a difference by living and acting on our values. It’s the right thing to do for our employees, our customers, and our communities,” Schulman said.
Darlene Heater, executive director of University City Partners, said the cancellation is a blow to the University City area.
“We’re extremely disappointed,” said Heater. “That’s 400 jobs that were coming to our area that are no longer coming.”
When I cautioned Mayor Roberts in January not to drive our community into this turmoil, this is the kind of thing I recognized would be a possibility.
N.C. Rep. Dan Bishop, who supported House Bill 2.
The Charlotte Chamber in a statement reiterated a call for “leaders at the city and state levels to contribute toward a solution that is in the best interest of our city and state.”
Legislators who supported House Bill 2 pointed the finger at Charlotte for passing the non-discrimination ordinance that started the controversy. Rep. Dan Bishop, a Charlotte Republican who helped draft the law, put the blame for PayPal’s decision on Mayor Jennifer Roberts.
“When I cautioned Mayor Roberts in January not to drive our community into this turmoil, this is the kind of thing I recognized would be a possibility,” Bishop said. “It’s not about HB2 because PayPal does business in Saudi Arabia and China. It is instead about a frenzy that the mayor and her allies on city council have whipped up.
“I think she might consider that she stop calling in airstrikes on her own position.”
Asked if he and fellow legislators bore any responsibility, Bishop said, “I don’t have any further comment.”
Tami Fitzgerald, executive director of North Carolina Values Coalition, criticized PayPal. The most controversial part of Charlotte’s non-discrimination ordinance would have allowed transgender people to use the bathroom of the gender they identify with.
“Companies like Paypal who are pushing their radical bathroom policies on states like North Carolina should think twice before they assert themselves into the policy decisions of the state,” said Fitzgerald.
Opponents of the bill, however, said the law will harm North Carolina’s ability to remain economically competitive.
“PayPal’s announcement that it’s taking 400 jobs out of Charlotte makes it clear as day that HB2 is dangerous and harmful legislation,” said Chris Sgro, the group’s executive director. “Governor McCrory and Senator Berger are willfully hurting North Carolina with HB2.”
Last month, the state’s Economic Investment Committee of the N.C. Department of Commerce unanimously approved $3.7 million in state incentives for PayPal. The state incentives would also have included $480,000 in community college training, as well as contributions from Charlotte and Mecklenburg County. The incentives packages would have been tied to the company hitting job creation and investment targets.
Observer staff writers Jim Morrill, Mark Price, Rick Rothacker and Deon Roberts contributed