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How North Carolina’s bathroom law sparked a business backlash

April 28, 2016 at 6:30 PM EDT
North Carolina’s High Point Market is the largest furniture industry trade show in the world. But weeks before designers and retailers arrived, the state legislature passed a law on the use of bathrooms and discrimination targeted at LGBT people, sparking outrage and protests. Special correspondent Roben Farzad explores the economic fallout as the backlash and boycotts spread.
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HARI SREENIVASAN: But, first, there’s been no letup in the anger, battles and protests in North Carolina over its new LGBT bathroom law. The fallout is not just political, but increasingly financial, as the backlash among business and companies keeps growing.

Special correspondent Roben Farzad filed this report from North Carolina for our weekly series Making Sense, which airs every Thursday.

ROBEN FARZAD: High Point Market, the biannual furniture trade show, is the biggest in the world, with almost 12 million square feet of show space.

MITCHELL GOLD, Co-Founder, Mitchell Gold + Bob Williams: This is one of our most interesting and exciting new pieces. This is the Sophia collection with the Duke chairs.

ROBEN FARZAD: Here, manufacturers like Mitchell Gold preview new products to retailers and designers, that is, if they show up. Weeks before market, the North Carolina legislature passed House Bill 2, directing people to use public bathrooms that match the gender on their birth certificate.

It also excludes gay and transgender people from state anti-discrimination protections. In response, some customers boycotted High Point Market.

MITCHELL GOLD: It’s not just that the attendance is down. It’s the buying power’s down. Williams-Sonoma, who owns Pottery Barn and West Elm, they’re not coming to market. And what I have asked people to do is, buycott, B-U-Y-C-O-T-T, us at the market, because we’re a company that doesn’t support this legislation.

ROBEN FARZAD: The economic stakes at High Point are, well, high. According to Duke University’s Lukas Brun, the market generates over $5 billion a year making it North Carolina’s biggest money-maker.

LUKAS BRUN, Duke University: And $600 million out of that is from visitor and tourism. And so take 10 percent off of the market, and then suddenly you lose $60 million.

ROBEN FARZAD: Industry consultant Mike Moore had planned to be here four days, but cut his trip to just one night. He thinks even more firms will boycott the next market in the fall.

MIKE MOORE, Consultant: This happened much too close to market. People couldn’t pull out. Most people, their goods for these exhibits were already here. They had already arrived and were ready to be set up into displays. They signed their contract six months ago. And they paid in full when they signed those contracts. There was no reaction time.

ROBEN FARZAD: Still, signs of opposition to HB2 were on display. Moore, who’s based in Asheville, North Carolina, has opted to start a new firm out of state.

MIKE MOORE: Our Series A funding is several million dollars, and that money could be here in North Carolina. And we made a decision it’s going to Florida. I don’t love Florida particularly.

(LAUGHTER)

MIKE MOORE: I mean, I sweat the whole time I’m there, but North Carolina as a whole is not a progressive state. And that’s why I unfortunately say it is the money that will make the difference.

ROBEN FARZAD: Of course, the business backlash to HB2 goes beyond High Point. Almost 200 executives have called for a repeal. PayPal scrapped plans for a new operations center and 400 new jobs, while canceled conventions have cost the state some $8 million and counting.

And then there are the shows that didn’t go on, from the Boss, to Cirque du Soleil, to Pearl Jam, and Ringo Starr.

MAYOR HAROLD WEINBRECHT, Cary, North Carolina: I was very much a Beatles fan, and I was looking forward to seeing Ringo Starr.

ROBEN FARZAD: But an even bigger blow to mayor Harold Weinbrecht of Cary, North Carolina, Deutsche Bank’s decision to freeze 250 new jobs at this software development center.

HAROLD WEINBRECHT: We have rumors of other companies looking at not coming here, putting jobs on hold in the future, and that’s the biggest concern. Who’s in the pipeline that we don’t know about that had Cary and someone else in their minds, and now are giving second thought to that, well, maybe that’s not the best place for us?

ROBEN FARZAD: State lawmakers passed HB2 to nullify a Charlotte ordinance permitting people to use public bathrooms based on their gender identity.

Dan Forest is North Carolina’s lieutenant governor.

LT. GOV. DAN FOREST (R), North Carolina: It would allow any man to go into any women’s restroom, girls’ locker room, women’s shower, girls’ shower facility, and be able to get away with it. We have seen that happen in Washington state that has a similar ordinance.

MAN: If we’re not willing to stand now, 20 years from now, my kids aren’t going to be able to stand. They’re going to go to jail.

ROBEN FARZAD: So, Forest and other backers insist HB2 must be upheld for safety’s sake, no matter what the cost.

LT. GOV. DAN FOREST: The life and the protection of one woman, one child related to this is so important, you can’t put a price tag on it.

ROBEN FARZAD: Besides, conservative lobbyist Tami Fitzgerald says almost 400 companies have signed a letter of support for HB2. But we could not find a firm to talk to us.

TAMI FITZGERALD, Conservative Lobbyist: The press has intensely badgered these people. These businesses get bullied by the other side, and they get threatened, and they just don’t want to go through the hassle.

ROBEN FARZAD: North Carolinians have mixed views on HB2; 38 percent support it in general, but more than half believe people should use the bathroom of their birth.

BOB PAGE, Founder and CEO, Replacements Ltd.: This plays out very well in the rural areas of North Carolina.

ROBEN FARZAD: Bob Page is the owner of Greensboro-based tableware retailer Replacements LTD. He’s long championed LGBT rights and has been vocal in his opposition to HB2. But his advocacy has driven some patrons away.

BOB PAGE: We have had hundreds of customers who say they will no longer do business with us, one who voiced, you know, about his Christianity, and that he hoped that the cesspool of sin that San Francisco is, where our brethren gay and lesbians live, that he hopes that they will slide into the ocean after a catastrophic earthquake.

And I thought, you know, those just don’t sound like very Christian views to me.

ROBEN FARZAD: Page has a number of transgender employees who are directly affected by HB2; 24-year-old Ty Little hasn’t used the men’s room since she was 17.

TY LITTLE, Replacements Ltd.: I remember, specifically I was at a bookstore, and I went in. And someone saw me go in and then mentioned to a manager, and they approached me about it, and told me not to do that in the future. And so I — it worries me a lot, for my safety.

ROBEN FARZAD: Page hired 20-year-old college student Payton McGarry part-time after he was fired from another position.

PAYTON MCGARRY, Replacements Ltd.: I have lost three jobs because I’m a transgender man.

ROBEN FARZAD: McGarry has joined a lawsuit challenging the constitutionality of HB2.

Tell me how this law affects your day to day.

PAYTON MCGARRY: I can walk into any business now and they can say, oh, we don’t serve trans people. Sorry.

The last time I have used the women’s bathroom was in high school. And it got to a point where it was so bad, I was being verbally and physically harassed every time I went into a women’s restroom, that they had to give me permission to use faculty restrooms, so I could avoid assault by my female peers.

ROBEN FARZAD: Both critics and defenders of HB2 rallied in Raleigh when the legislature reconvened this week; 54 protesters were arrested. But the law still stands and the financial fallout continues.

Back in High Point, organizers say it will be at least a week before attendance numbers are in and the effect of HB2 can be assessed.

For the “PBS NewsHour,” this is Roben Farzad reporting from North Carolina.

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