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Boycotts by Businesses Can Still Be Effective

Hi, I’m Jeremy Quittner, a writer for Fortune.com’s Venture channel. I’ll be filling in for Ellen McGirt until Wednesday while Ellen crunches on some magazine assignments.

Here’s a question for you: Will boycotts by businesses continue to be effective in getting state lawmakers to drop legislation aimed at restricting LGBT rights?

I can’t help wondering about this as eight more states plan to introduce so-called bathroom bills in 2017: Alabama, Kentucky, Minnesota, Missouri, South Carolina, Texas, Virginia and Washington. The bills seek to replicate legislation enacted by North Carolina in the spring of 2016, known as House Bill 2, or HB2. That law, which targets transgender people, requires people to use public bathrooms associated with their gender at birth. It also pares back civil rights protections for LGBT people in the state.

In addition to prompting a lawsuit from the Department of Justice, where U.S. Attorney General Loretta Lynch in May condemned the law as state-sponsored discrimination, businesses denounced the law and many boycotted the state. PayPal and Deutsche Bank scrapped expansion plans that would have added hundreds of jobs. Salesforce canceled events and threatened to pull state investments. The National Basketball Association moved its All-Stars game from Charlotte, and a host of performers including Bruce Springsteen and Itzhak Perlman cancelled performances there.

Over the past couple of years, threats of business boycotts effectively turned the tide on similar bills in Arizona, Georgia, and Indiana, where in 2015 now Vice President-elect Mike Pence reluctantly vetoed anti-LGBT legislation following loud business protests. All told, North Carolina jeopardized as much as $5 billion in federal funding, business investment, and travel and tourist dollars when it enacted HB2, according to a study by the Williams Institute at UCLA Law.

Yet as proof that the boycott strategy may be faltering, North Carolina legislators have dug in their heels. Despite a last-minute attempt at a compromise that would have rolled back the law, lawmakers voted in December to keep it in place.

In fact, North Carolina Lieutenant Governor Dan Forest released a statement urging conservative defiance in support of HB2, following his and Pat McCrory’s election defeat by Democratic candidate Roy Cooper.

“No economic, political, or ideological pressure can convince me that what is wrong is right,” Forest wrote, urging the law’s supporters to carry on their battle.

Businesses that are inclined to take a political stance may have to tread more carefully with Donald Trump as president. The new Commander-in-Chief has made a habit of singling out companies whose strategies he disagrees with. And while he has yet to wade into the bathroom bill controversy, his penchant for capricious tweeting about everything from Jackie Evancho’s album sales to The Apprentice indicates it’s not a stretch for him.

Still, business groups like the National Gay and Lesbian Chamber of Commerce (NGLCC) say most corporations want to operate in cities and states with strong anti-discrimination policies in place. And whether their boycotts succeed or not, most big businesses aim to send a powerful message to their employees and customers that they don’t discriminate.

“State economies succeed only when there is a fully engaged and protected citizenry, workforce and supply chain, free,” says Justin Nelson, the co-founder and president of NGLCC.

 

 

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Quote

I want our young people to know that they matter. That they belong. So don’t be afraid. You hear me? Young people don’t be afraid. Be determined. Be hopeful. Be empowered.
—First Lady Michelle Obama