PayPal has abandoned plans for a new global operations center in Charlotte, North Carolina, after the US state passed a "religious freedom" act that allows discrimination against employees on the grounds of gender identity and sexuality.
"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," said CEO Dan Schulman.
"This decision reflects PayPal's deepest values and our strong belief that every person has the right to be treated equally, and with dignity and respect. These principles of fairness, inclusion and equality are at the heart of everything we seek to achieve and stand for as a company. And they compel us to take action to oppose discrimination."
The $3.6m PayPal center in Mecklenburg County was announced on March 18 and would have provided 400 skilled jobs for the community. Governor Pat McCrory estimated it would add $20.4m a year in payroll impact for the city, and said PayPal was one of many tech firms moving to the area.
But five days later the Republican-controlled state legislature passed House Bill 2, or the Public Facilities Privacy & Security Act. The bill requires transgendered people to use the bathroom of their original gender unless they have changed it on their birth certificate, banned local LGBT equality ordinances, and forbade changes to the state's minimum wage.
The legislation was passed in a single day, and was unopposed in the Senate after Democratic members walked out en masse, calling the process an abuse of power. McCrory signed the bill that evening and bathrooms across North Carolina were "safe" again.
I signed bipartisan legislation to stop the breach of basic privacy and etiquette, ensure privacy in bathrooms and locker rooms.— Pat McCrory (@PatMcCroryNC) March 24, 2016
However, the move sparked a storm of criticism, both inside and outside the state. Marc Benioff of Salesforce.com was one of the first in the tech sector to disavow the legislation, and Google and Facebook added support. Now those words are moving to action and PayPal is not the first to move elsewhere in the Land of the Free.
Last week Google Ventures, the venture capital arm of Google, got a memo from CEO Bill Maris saying the fund would no longer be investing in North Carolina until the law was changed, and two Hollywood studios have cancelled forthcoming shoots in the state.
But PayPal is the first tech firm to actually translate words into direct action in the Tar-Heel state, and another similarly sized investment deal with Braeburn Pharmaceuticals is on hold as the company is "reevaluating our options based on the recent, unjust legislation."
In other states, the response from tech firms has been a factor in repealing similar legislation last year in Indiana. Cancelled deals by Salesforce.com and Angie's List were a factor in the amendment of a law allowing the refusal of service based on their sexuality, but North Carolina is holding firm for "safe state bathrooms."
"There's no doubt there is a well-coordinated, national campaign to smear our state's reputation after we passed a common-sense law to ensure no government can take away our basic expectations of privacy in bathrooms, locker rooms and showers," said Josh Ellis, communications director for Governor McCrory. ®