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Salesforce boycotts Indiana over fear of LGBT discrimination

March 26, 2015, 8:51 PM UTC

Business leaders on Thursday spoke out against a controversial law passed in Indiana Thursday that could give businesses the green light to deny service to same-sex couples.

The loudest opposotion so far has come from Marc Benioff, founder and CEO of business tech company Salesforce, who declared on Twitter that his company would boycott the state altogether.

Max Levchin, co-founder of PayPal and an investor in Yelp also spoke out against the new law.

The outcry is in response to Indiana’s Republican Gov. Mike Pence signing into law a “religious freedom” bill that will free individuals and business owners from abiding by state and local laws that “substantially” burden their exercise of religion, unless the government can prove that it has a compelling interest and is doing so by the least restrictive means.

Supporters of the measure say it will protect people and business owners with strong religious convictions from government intrusion.

Opponents, meanwhile, claim it paves the way for discrimination, especially against gays and lesbians.

In addition to Salesforce’s boycott of Indiana, the state’s hot-button law also received condemnation from other folks with business ties to the state.

The Christian Church (Disciples of Christ) said it would boycott the state if the “religious freedom” bill passed. In a letter sent to Pence on Wednesday, the group that’s been headquartered in Indianapolis for nearly 100 years threatened to move its general conference and its 6,000 attendees from Indianapolis, where it’s scheduled to take place in 2017.

The CEO of Gen Con, a 50,000-person gamers’ gathering that’s reportedly Indianapolis’s largest convention in attendance and economic impact, said the law could prompt the group to move the event after 2020, when its contract with the city expires. “Legislation that could allow for refusal of service or discrimination against our attendees will have a direct negative impact on the state’s economy, and will factor into our decision-making on hosting the convention in the state of Indiana in future years,” said Adrian Swartout, Gen Con owner and CEO in the letter.

Indianapolis is also home to this year’s NCAA Final Four, set to take place next weekend at Lucas Oil Stadium. So far the NCAA has only said it’s “concerned” about the legislation.

The backlash from business is reminiscent of opposition by some businesses to a similar bill in Arizona last year. Governor Jan Brewer eventually vetoed the legislation after it received harsh criticism from the likes of Delta Air Lines, the Super Bowl host committee, and Major League Baseball.

Benioff’s vocal criticism of the “religious freedom” bill is in line with his reputation in Silicon Valley as a philanthropist and advocate for social good. While his company’s stance on Indiana’s new law is clear, what’s less certain is how the cloud computing company conducts business in other jurisdictions that discriminate against the LGBT community. When Fortune asked if the company applies or plans to apply its stance toward Indiana to other regions that discriminate against or persecute LGBT individuals—such as some countries in the Middle East and Russia—a Salesforce spokeswoman said the company wasn’t—at that time—commenting beyond Benioff’s tweets.

With its “religious freedom” bill becoming law Thursday, Indiana is the first state to enact the measure that been introduced in several others. According to the Human Rights Campaign, lawmakers are considering similar bills in Arkansas, Alabama, Colorado, Georgia, Hawaii, Michigan, Missouri, Mississippi, North Carolina, Oklahoma, South Carolina, South Carolina, South Dakota, Texas, Utah, Virginia, West Virginia, and Wyoming.

The legislative push come against a backdrop of the expanding legalization of same-sex marriage, which is now allowed in 36 states and in limbo in a 37th—Alabama, where there have been contradicting state and federal court orders on the matter.

The Human Rights Campaign says that the bills go beyond marriage equality and “risk undermining, even crippling, fundamental protections and basic dignity for LGBT Americans and other minority groups.” The group says that the legislation would, for example, allow an evangelical police officer to refuse to patrol a Jewish street festival or “an EMT could claim the law is on his side after refusing service to a dying transgender person in the street.”

Some of the proposed bills have already petered out because of business pushback.

A so-called conscience protection bill in Arkansas died in the Judiciary Committee in February a day after Arkansas-based Wal-Mart said the legislation would send “the wrong message about Arkansas, as well as the diverse environment which exists in the state.” Republicans in the state house of representatives haven’t ruled out introducing a new version of the bill this session.

While the bills seem to be in response to the legalization of same-sex marriage, their model is actually the Religious Freedom Restoration Act that was signed into law in 1993 by President Bill Clinton. The act attempted to restore some of the rights of religious practitioners that had been limited by a 1990 Supreme Court Decision, but a 1997 decision by the Supreme Court kept the Act from being applied to the federal government. The ruling prompted several states to introduce the Act at a more local level.