PayPal’s headquarters in San Jose. (Jeff Chiu/AP)

The backlash against a North Carolina law that bars local governments from extending civil rights protections to gay and transgender people continued Tuesday, with PayPal saying it is abandoning plans to expand into Charlotte in response to the legislation.

This decision came just weeks after PayPal, the California-based online payments firm spun off from eBay, said it would open a global operations center in Charlotte, a move that state officials said would bring millions to the local economy and employ 400 people.

“The new law perpetuates discrimination and it violates the values and principles that are at the core of PayPal’s mission and culture,” Dan Schulman, PayPal’s president and chief executive, wrote in a statement on Tuesday. “As a result, PayPal will not move forward with our planned expansion into Charlotte.”

North Carolina’s law was introduced to override a civil rights ordinance passed in Charlotte this year that said transgender people in the state’s largest city could use bathrooms corresponding with their gender identity.

Last month, state lawmakers hastily introduced and passed a bill that overrode Charlotte’s measure and said that transgender people were prohibited from using bathrooms that do not correspond with the gender listed at their birth.

Gov. Pat McCrory (R) signed the state measure, praising it as needed “to stop this breach of basic privacy and etiquette” in Charlotte. 

North Carolina Gov. Pat McCrory (R) has defended the law. (Jerry Wolford/Bloomberg News)

The state law was quickly pilloried by LGBT rights groups and a host of companies, including Apple, Google, American Airlines and Lowe’s. The NBA, which has a franchise in Charlotte, suggested that it was considering moving next season’s All-Star game out of that city because of the law. A lawsuit filed against the legislation last week called it tantamount to legalized discrimination.

This law could also cost the state federal funding. At least five federal agencies are debating whether to withhold money because of the law.

McCrory has defended the state law as necessary to protect people using a public restroom or locker room. In a video message posted last week, he said the state “has been the target of a vicious, nationwide smear campaign.”

North Carolina Gov. Pat McCrory released a video on March 29 dismissing criticism of a law banning transgender people from using bathrooms aligned with their gender identity. McCrory says some are demonizing the law "for political gain." (Office of Governor Pat McCrory)

A spokesman for McCrory did not respond to a request for comment about PayPal’s announcement Tuesday.

North Carolina Attorney General Roy Cooper (D), who is facing McCrory in what is expected to be a tight gubernatorial race in November, said the law cost the state “new, better paying jobs” and called on McCrory to repeal the legislation. 

The Republican leaders of the state legislature pointed the blame for PayPal’s decision at Cooper and Charlotte Mayor Jennifer Roberts (D), arguing that the “radical bathroom policy” was responsible for the situation.

“If Jennifer Roberts, Roy Cooper and the far-left Political Correctness Mob she’s unleashed really care about the economic future of her city, they’ll stop the misinformation campaign immediately and start telling the truth about this commonsense bathroom safety law before more damage is done to the city she was elected to lead and the state Cooper was elected to protect,” Sen. Phil Berger, president pro tempore of the state Senate, and Rep. Tim Moore, speaker of the state House, said in a joint statement.

On Tuesday, Schulman said PayPal regretted its decision to abandon the Charlotte facility but called the choice “clear and unambiguous.”

“As a company that is committed to the principle that everyone deserves to live without fear of discrimination simply for being who they are, becoming an employer in North Carolina, where members of our teams will not have equal rights under the law, is simply untenable,” he said.

Schulman said that PayPal would find another home for its operations center, but he did not specify where or when a decision would be made. Other elected officials city quickly threw their hats into the ring.

Vermont Gov. Peter Shumlin (D) wrote a letter to Schulman saying that his state would be a natural fit. “We would welcome you – as we do all our citizens no matter their gender, race, sexual orientation, or gender identity – with open arms,” Shumlin wrote. 

Washington’s deputy mayor for public safety and justice, Kevin Donahue, suggested the District as a replacement:

Washington Mayor Muriel E. Bowser (D) — who retweeted that message and tweeted, then deleted, another message aimed at PayPal — last week banned official travel from the nation’s capital to North Carolina due to the law.

D.C. Council member David Grosso introduced a bill Tuesday that would enshrine Bowser’s travel ban in District law. Any state that passes similar legislation — including Mississippi, which passed a sweeping bill Tuesday letting businesses refuse services to gay people — would also be subject to the permanent ban.

“The blatant bigotry on display led me to believe these states were not a safe destination for our public employees,” Grosso said. “They should not be forced to travel to places that pride themselves on anti-LGBT” laws.”

The District’s ban is one of several announced since North Carolina’s law was enacted, including New York Gov. Andrew M. Cuomo (D), who signed an order saying that “the will of the many cannot be the basis for discrimination against the few.”

Cuomo’s statements drew a sharp response from McCrory’s office, which pointed out that the governor had no qualms about people traveling to Houston, where voters rejected a measure designed to protect gay and transgender people last November.

Josh Ellis, a spokesman for McCrory, said Cuomo was being hypocritical by not calling on the Syracuse University men’s basketball team to skip the Final Four in Houston due to that vote. (Syracuse ultimately lost to the North Carolina team in their match-up over the weekend.) The NCAA, which spoke out against the North Carolina law and others in Georgia and Indiana, never got involved in Houston’s debate.

The decision by PayPal to nix its Charlotte plans appears to be the biggest response yet from a major company. And it affects something that McCrory had praised just days before he signing the controversial law last month.

McCrory called North Carolina “the ideal destination” for such a company in a statement he released last month. The company’s choice of North Carolina “means that we can add another prominent name to the state’s growing list of technology businesses with major operations here,” McCrory said.

“PayPal’s announcement today sends a loud and clear message to Governor McCrory that discrimination is not only bad for North Carolina and bad for people — it’s bad for business,” Chad Griffin, president of the Human Rights Campaign, said in a statement.

McCrory’s office had said that PayPal would invest more than $3.6 million in Mecklenburg County by the end of next year. His office also said that a state grant, approved in March, made PayPal eligible for $2.7 million in reimbursements over the next 12 years.

A new Hulu show that was supposed to film around Charlotte was relocated due to the new law, the Charlotte Observer reported on Monday. Lionsgate, the company producing the show, declined to comment Tuesday.

Aaron C. Davis contributed to this report.

Further reading:

‘Wrong beyond repair.’ N.C. newspapers blasted the law

Groups file lawsuit against North Carolina law

Georgia’s governor just vetoed a religious freedom bill

The trick in North Carolina’s law

This story has been updated. First published: 11:10 a.m.