Politics & Government

Understanding HB2: North Carolina’s newest law solidifies state’s role in defining discrimination

Update: On March 30, 2017, the N.C. General Assembly approved a compromise bill that repealed House Bill 2 but restricts anti-discrimination ordinances in cities and counties. Gov. Roy Cooper signed the measure into law. The  story below follows HB2 from  its passage.


In a one-day specially convened session on March 23, 2016  North Carolina’s legislature passed a sweeping law that reverses a Charlotte ordinance that had extended some rights to people who are gay or transgender.

The law passed by the General Assembly and signed that same night by Gov. Pat McCrory goes further than a narrow elimination of Charlotte’s ordinance, which had generated the most controversy by a change that protected transgender people who use public restrooms based on their gender identity. The new law also nullified local ordinances around the state that would have expanded protections for the LGBT community.

The state has long had laws regulating workplace discrimination, use of public accommodations, minimum wage standards and other business issues. The new law – known as HB2, the Charlotte bathroom bill or, more officially, as the Public Facilities Privacy and Security Act – makes it illegal for cities to expand upon those state laws, as more than a dozen cities had done, including Charlotte, Raleigh, Chapel Hill and Durham.

North Carolina’s new law sets a statewide definition of classes of people who are protected against discrimination: race, religion, color, national origin, age, handicap or biological sex as designated on a person’s birth certificate. Sexual orientation – people who are gay – was never explicitly protected under state law and is not now, despite recent court decisions that legalized same-sex marriage.

Transgender people who have not taken surgical and legal steps to change the gender noted on their birth certificates have no legal right under state law to use public restrooms of the gender with which they identify. Cities and counties no longer can establish a different standard. Critics of the Charlotte ordinance cite privacy concerns and say it was “social engineering” to allow people born as biological males to enter women’s restrooms.

McCrory’s office says businesses aren’t limited by the bill, and that private companies and private universities can adopt new or keep existing nondiscrimination policies. Private businesses can establish their own practices concerning LGBT employees and customers.

The pushback has been intense. On July 21, the National Basketball Association announced it will move its All-Star Game from Charlotte in 2017, which will cost the city an estimated $100 million. That decision follows cancellations of business expansions and entertainment events by companies and performers protesting HB2.

In September, the reprisals against the state have intensified. On Sept. 12, the NCAA removed seven championships scheduled to be held in North Carolina during the 2016-17 academic year, including two rounds on the wildly popular men’s basketball tournament -- all because of HB2.

Forty-eight hours later the Atlantic Coast Conference followed suit. It announced it was moving the conference’s football championship game in December from Charlotte, again in protest to the law.

HB2 supporters from McCrory on down dug in, setting the stage for November elections in which the law was expected to play a potentially decisive role, even as the courts continue the process of deciding whether HB2 discriminates.  McCrory lost his bid for reelection to Attorney General Roy Cooper. Observers of all political stripes agreed that the governor's support of HB2 probably cost him the election.

On Dec. 19, 2016, following a surprise move by the Charlotte City Council, Republican Gov. Pat McCrory Monday called for a special session Wednesday, Dec. 21 to consider repeal of House Bill 2.

McCrory’s call came hours after the Charlotte City Council voted 10-0 with Mayor Jennifer Roberts’ support  to rescind the LGBT ordinance that prompted HB 2.

On Dec. 21, the N.C. Senate voted down a repeal of HB2 after a day of increasingly partisan rancor that pitted conservative Republicans against the Charlotte they so distrust. The state House adjourned without voting on repeal of the bill that has cost North Carolina millions of dollars in lost jobs, sports events and boycotts. With that, the hope of compromise between legislators and Charlotte, which enacted the ordinance that gave rise to HB2, dissolved.

Here are additional questions and answers about the new law:

Does HB2 affect rights of people who aren’t gay or transgender?

Yes. The law changes the way people pursue claims of discrimination because of race, religion, color, national origin, biological sex or handicap in state courts. While the legislature amended HB2 to restore the rights of residents to sue on these grounds in state courts, it shortened the window for filing complaints from three years to one.

The law also means a city or county cannot set a minimum wage standard for private employers.

Are other states taking the same approach?

Yes. Some states and local governments are considering or even passed new laws aimed at blocking specific LGBT rights. The national headquarters of the ACLU describes North Carolina’s HB2 as the “most extreme anti-LGBT measure in the country.” Some legal experts say the N.C. bill combines elements of laws in other states that make it more comprehensive. South Dakota’s legislature passed a bill focused specifically on public schools; that bill was vetoed by the governor, the ACLU said. States that recently have proposed similar measures include Georgia, Indiana, Kentucky and West Virginia, experts say.

None has the sweep of HB2, UNC Chapel Hill law professor Maxine Eichner said in May. "Nobody has passed a law like this."

How big a court fight will this be?

At least five lawsuits have been filed against or in support of the law. On one side: The ACLU, Equality North Carolina and other groups sued within days of HB2 becoming law. The U.S. Justice Department followed on May 9 after first warning the state that the law jeopardizes billions of federal dollars the state receives each year in money for schools, colleges and other issues.

Also in early May, McCrory and Republican legislative leaders Phil Berger and Tim Moore filed their own complaints, accusing the federal government of distorting discrimination law to include LGBT protections and asking the federal courts to deem HB2 nondiscriminatory.

The cases have been filed in two separate federal courts and have been assigned to three different judges.

The ACLU and the U.S. Justice Department has asked a judge to suspend HB2 while its lawsuit is being decided, arguing that damage is done to the LGBT community every day the law is in place.

On Aug. 26, 2016, U.S. District Judge Thomas Schroeder gave the HB2 critics a partial victory when he banned the University of North Carolina from enforcing HB2 against the transgender plaintiffs in the lawsuit pending his ruling in the trial.

Federal documents indicate the trial on the ACLU's lawsuit could take place as early as October or November. It would not be unreasonable to expect Schroeder's ruling by the summer of 2017, perhaps before. The losing side would almost certainly appeal to a higher court.

Meanwhile, 21 states have joined North Carolina in opposing the federal mandate that transgender individuals be allowed to use the public bathrooms that matches their sexual identity or lose federal money.

On Aug. 22, 2016, a federal judge in Texas issued a nationwide order blocking the Obama administration order that would give transgender students in public schools access to bathrooms and locker rooms matching their gender identity.

The ruling by U.S. District Judge Reed O’Connor, who is hearing the lawsuit by the 21 states, dealt a setback to the government’s argument that Title IX anti-discrimination protections apply to transgender students. It also moves the battle over transgender rights one procedural step closer to a showdown in the Supreme Court.

What federal protections exist for workplace discrimination for LGBT employees?

There is no federal law that specifically prohibits discrimination against LGBT citizens in their jobs. The Employment Nondiscrimination Act that would do so has been proposed for many years, but has not passed.

Can someone be fired in North Carolina for being gay or transgender?

Yes. North Carolina is an “at will” employment state and offers limited protection for all workers. State law has never included protections for workers who are LGBT. The language in HB2 makes it more clear that the state does not intend to create a new class of protections based on sexual orientation or identity, and also will not allow cities and counties to create such a protected class.

How does HB2 affect schools?

Under HB2, North Carolina now requires students to use public school restrooms and locker rooms based on the gender on their birth certificates. The federal government says that violates Title IX of the Civil Rights Act that prohibits discrimination in all school programs. The federal government includes sexual identity and orientation under the broader category of sex discrimination.

McCrory and other HB2 supporters accuse the Justice Department, the U.S. Department of Education and other federal officials of "radically reinterpreting" discrimination law to include LGBT individuals. The 4th Circuit Court of Appeals, which has precedence in North Carolina, ruled in a recent Virginia transgender bathroom case that the federal agencies acted within their rights to include LGBT protections.

That leaves the state's public colleges, universities and local school districts caught in the middle of a bitter court fight, with potentially billions of federal education dollars at stake.

North Carolina's school superintendent said in May that school districts across the state were not complying with HB2. That appeared to be the case in Charlotte-Mecklenburg Schools, the state's second largest district. The Rowan-Salisbury schools did say it would follow state law while respecting the privacy of all of its students.

The University of North Carolina System announced in May it will not enforce HB2.

Where is public opinion in North Carolina on LGBT rights?

In 2012, a constitutional ban on same-sex marriage passed with more than 60 percent of the vote. A June 2015 poll from the Democrat-leading Public Policy Polling of Raleigh showed that 44 percent of state residents supported same-sex marriage, with 46 percent opposed. Last April, an Elon University poll found that 63 percent of the state’s registered voters disagreed with the state’s magistrate law. The same poll showed that 51 percent of Republicans supported a business’ right to deny service to customers based on religious objections.

On HB2, an Elon poll in late April showed that 49 percent of state residents polled supported the bathroom provisions of the law.

What are some of the political factors driving this?

Conservative religious groups within North Carolina are taking some credit for getting HB2 passed into law, and pro-LGBT rights advocates note there is financial support from national groups with similar interests. Many also believe gay and transgender issues are being used by politicians to motivate voters in a presidential and gubernatorial election year. In North Carolina, both Republicans and Democrats are using HB2 as a rallying point for supporters, with each side believing that the law can win them votes.

Nowhere are the battle lines more clearly drawn than in the governor's race between McCrory, an HB2 defender, and Attorney General Roy Cooper, a Democrat who believes the law should be repealed.

Predictably, both came out on different sides on the NBA decision to move the All-Star game, using powerful statements to attack each other.

Southern Evangelical Seminary president Richard Land says the situation may indicate a growing anger in the country on both the left and right. “I don’t like the form the revolution is taking,” he said. “Donald Trump is coarse and crude and frankly, dangerous, but I understand what is behind it. ...The establishment in Washington shows signs of existing more for its own benefit than for the people they were elected to serve.”

How did Democrats vote on HB2?

The vote in the N.C. House was 84-25 after three hours of debate, with all Republicans voting for it and 11 Democrats breaking ranks with their party to support the bill. In the Senate, the vote was 32-0 after the Democrats walked out in protest, saying they had not been allowed to participate in the process. McCrory, a Republican, then signed it into law.

Could this hurt economic development and tourism in North Carolina?

It already has. The loss of the sporting events will cost the economy millions, a loss that will trickle down through the hotel and restaurant sectors.

After the law passed, PayPal canceled a much-ballyhooed expansion in Charlotte that would have included 400 jobs.

In the Triangle, Braeburn Pharmaceuticals said it was reconsidering a research and manufacturing facility in Durham that included 52 jobs and a $20 million investment.

Now the NBA decision eliminates an estimated $100 million windfall for the Charlotte area.

Major employers in North Carolina – American Airlines, Lowe’s, Apple, Facebook, Google, Microsoft, to name a few – all have said they’re disappointed with the measure, though they haven’t threatened to pull out from the state.

On the entertainment front, headline acts from Bruce Springsteen to Itzhak Perlman and Pearl Jam have canceled shows in Charlotte, Greensboro and other N.C. venues. On Friday, May 20, Maroon 5 joined the list.

On tourism and economic-development fronts, some business leaders say the new law is feeding a perception that North Carolina isn’t inclusive.

The British government went so far as to issue a travel advisory to its LGBT citizens who planned to travel to the state.

The N.C. Justice Center says that if federal money for education, job training and public safety is withheld -- which most believe is unlikely -- the state could lose 53,000 jobs or $2.4 billion in wages. Conservatives say those numbers are wildly high and being used as a scare tactic.

If boycotts happen, do they work?

South Carolina was the subject of many boycotts for flying the Confederate flag at the state capitol. The NAACP announced a national boycott of the state in 2000. Tourism officials estimated the state lost $7 million in the first month as groups from the NCAA to the American Bar Association joined the protest. The loss of sporting events alone cost Columbia, Charleston and Greenville-Spartanburg millions of dollars every year, reports say. The flag was removed last year not because of boycotts, but after the mass killings at a Charleston church that appear to have been racially motivated.

Haven’t cities other than Charlotte expanded nondiscrimination ordinances?

Charlotte’s ordinance was the first of its kind in North Carolina. Three South Carolina cities have similar ordinances: Columbia, Charleston and Myrtle Beach. They’re written differently, but “conceptually are identical” to what Charlotte did, city attorney Bob Hagemann has said. Those South Carolina cities and more than 200 other cities around the nation where similar ordinances exist have not reported problems with transgender bathroom use.

This story was updated on Sept. 14, 2016


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