PayPal, an online payments giant, has withdrawn from its plan to build its new global operations centre in Charlotte, North Carolina, as a result of the state passing its Public Facilities and Security Act.

The controversial law, dubbed the 'bathroom bill' and also known as the HB2 bill, was signed by the state governor Pat McCrory in late March. It bans individuals from using public bathrooms that do not correspond with their biological sex. It also prevents cities and counties from passing rules preventing discrimination against gay, lesbian, bisexual and transgender people.


“The legislation recently enacted by the state of North Carolina that denies the equal rights of lesbian, gay, bisexual and transgender citizens violates the values and principles that are at the core of PayPal’s mission and culture,” PayPal CEO Dan Schulman explained in a statement sent to fDi Magazine.

“PayPal will not move forward with our planned expansion into Charlotte. 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,” added Mr Schulman in his statement.

PayPal's decision will cost Charlotte 400 jobs and comes shortly after Braeburn Pharmaceuticals – a Princeton-based firm that planned to invest nearly $20m in Durham, the state's main biotech hub – announced that it is “re-evaluating our options based on the recent unjust legislation”. 

Even before the announcement made by PayPal, following passage of the bill and Braeburn's announcement, Charlotte Chamber of Commerce issued a statement saying the bill puts the positive perception of Charlotte and North Carolina at risk, and as a consequence the state might suffer economic repercussions, especially for the travel and tourism industry.

Experts agree the HB2 bill will hurt North Carolina's investment potential. “The fight for talent in sectors such as tech is very strong and while seeing companies moving out of the state because of HB2 might be extreme, there might be fewer companies willing to bet on the state,” said Angelos Angelou, founder of Angelou Economics, an Austin-based consultancy. “A diverse talent pool and better ability to serve diverse group of customers makes sense from ethical, but also commercial point of view. The wider group they serve, the bigger revenue,” said Robbie Medwed, education director at Sojourn, a Georgia-based entity focusing on lesbian, gay, bisexual and transgender affirmation. “The same goes for states and I find it surprising that North Carolina's leadership does not see that,” he added.