North Carolina Gov. Pat McCrory explains his executive action on Apr. 12, after public outcry over the state’s “bathroom bill.” (Youtube/Office of Governor Pat McCrory)

North Carolina Gov. Pat McCrory (R) responded to a backlash against the state’s new law banning anti-discrimination protections for gay and transgender people by signing an executive order Tuesday aimed at calming the firestorm, even as he left the most controversial provisions intact.

McCrory said he was expanding protections for state employees, which would prevent these workers from being fired for being gay or transgender. He also said he would seek legislation restoring the right to sue for discrimination.

In his order, McCrory stopped short of altering the bill’s most high-profile provision mandating that transgender people use bathrooms that correspond only with the gender on their birth certificate.

McCrory defended the state law as being needed to respond to what he called the “government overreach” of a Charlotte city ordinance that expanded civil rights protections for people based on sexual orientation and gender identity. In a videotaped message announcing the order, he said the issue had sparked what he called “selective outrage and hypocrisy.”

Roy Cooper, the North Carolina attorney general, and multiple LGBT groups criticized McCrory’s order as being a half-measure that left discrimination intact.

“Governor McCrory’s executive order is a day late and a veto short,” Cooper, a Democrat and McCrory’s gubernatorial opponent this fall, said in a statement. “The sweeping discrimination law he signed has already cost North Carolina hundreds of jobs and millions of dollars in revenue. I’m glad Governor McCrory has finally acknowledged the great damage his legislation has done, but he needs to do much more.”

This law prompted intense backlash from LGBT groups and big businesses alike, with a host of major companies criticizing the legislation. The state law prohibits transgender people from using public bathrooms in schools and government facilities that don’t match the gender on their birth certificate, and it also barred local governments from extending civil rights protections to gay and transgender people.

Two major companies — PayPal last week and, earlier on Tuesday, Deutsche Bank — announced that they would call off proposed expansions in North Carolina due to the new law, which a tourism agency said could wind up costing the state millions in lost revenue.

The Charlotte Chamber of Commerce offered praise for McCrory’s order on Tuesday, saying it was in favor of anything that promoted the city and state “as places that promote diversity, inclusiveness and equality.”

“We applaud the governor’s actions today which demonstrate that North Carolina is an open and welcoming state,” the Charlotte Chamber of Commerce said in a statement. “We strongly encourage the leadership and members of the General Assembly to take quick action to the governor’s call to ensure citizens have the right to pursue claims of discrimination at the state level.”

State Rep. Tim Moore (R), speaker of the North Carolina House of Representatives, said that the legislation has “been unfairly reported and maligned by political activists” so far.

“Governor McCrory’s executive order affirms the importance of the actions the General Assembly took in passing the Bathroom Bill to protect North Carolina citizens from extremists’ efforts to undermine civility and normalcy in our everyday lives,” Moore said in a statement.

The American Civil Liberties Union of North Carolina and other rights groups criticized McCrory’s action for leaving the bathroom provision and other elements of the law intact.

“Gov. McCrory’s actions today are a poor effort to save face after his sweeping attacks on the LGBT community, and they fall far short of correcting the damage done when he signed into law the harmful House Bill 2, which stigmatizes and mandates discrimination against gay and transgender people,” Sarah Preston, acting executive director of the ACLU of North Carolina, said in a statement.

The ACLU and other groups filed against the legislation that called it tantamount to legalized discrimination. On Tuesday, a spokesman for the ACLU said the order changes nothing and that the suit would proceed.

McCrory said in his video announcement that his executive order “maintains common sense gender-specific restroom and locker facilities in government buildings and in our schools,” but said that private businesses could continue to set their own rules for bathrooms and locker rooms. (In an earlier version of this post, we noted that McCrory’s executive order said businesses could decide their own bathroom policies, which was already the language of the bill and something McCrory was just affirming rather than changing. Incorrect earlier text here.)

McCrory also said he would seek legislation in a coming short legislative session that would reinstate the right to sue for discrimination in state courts.

Sarah Warbelow, legal director for the Human Rights Campaign, said McCrory’s order “really doesn’t do much of anything.”

“I think the governor has misunderstood what the opposition to this bill was all about,” Warbelow said in an interview Tuesday. “He doesn’t seem to understand that businesses…are deeply concerned about the discrimination against transgender people, that they’re deeply concerned that if they are asking their employees to move to this state, that it puts either the employee or the employee’s family in a really tenuous situation.”

McCrory’s announcement comes as the controversial law, which he signed last month, has already caused North Carolina to lose hundreds of jobs as two major companies scrapped planned moves in the state. PayPal announced last week it would abandon plans for a new facility in Charlotte due to the law, and Deutsche Bank said Tuesday it was calling off an expansion in the state for the same reason.

“We take our commitment to building inclusive work environments seriously,” John Cryan, co-chief executive of Deutsche Bank, said in a statement Tuesday.

Deutsche Bank had announced plans to add 250 new jobs through an expansion at a software application development center in Cary, N.C., about 11 miles away from the state capital in Raleigh. The center already employs 900 people, according to the bank.

When this expansion was announced, McCrory released a statement saying that North Carolina’s “IT talent, competitive costs, great quality of life and convenient proximity by air to New York City will continue to help foster the growth and success of pioneering businesses like” Deutsche Bank.

State officials said that the Deutsche Bank expansion would have employed enough people for the combined payroll of these new jobs to be worth more than $21 million before benefits. The company would have been eligible for reimbursements after creating jobs.

“We’re proud of our operations and employees in Cary and regret that as a result of this legislation we are unwilling to include North Carolina in our U.S. expansion plans for now,” Cryan said. “We very much hope that we can re-visit our plans to grow this location in the near future.”

Deutsche Bank’s announcement comes a week after PayPal, an online payments firm based in California, said the new legislation prompted it to cancel its own planned expansion into North Carolina. The proposed facility in Charlotte was expected to employ 400 people and bring millions of dollars to the local economy, according to McCrory’s office.

Supporters of the new law gathered at a rally at the North Carolina state capitol in Raleigh on April 12. (Gerry Broome/AP)

Last week, Bruce Springsteen also announced that he was canceling a show in Greensboro, N.C., to “show solidarity for those freedom fighters” contesting the new law.

The North Carolina law was hastily introduced by lawmakers and signed by McCrory, who has defended it against criticism by saying it “provided protection of our basic expectation of privacy in public restrooms and locker rooms.” Supporters of the legislation have defended it and similar bills in other states as necessary measures.

The law has come under consistent fire from LGBT rights groups and major companies including Apple, Google and American Airlines. It could also potentially cost the state major events like the next NBA All-Star game, currently scheduled to be held in Charlotte.

Officials in the state are already reporting tourism losses and event cancellations due to the law. As of this week, five groups canceled events planned in the Wake County region, which would have brought the local economy more than $732,000, according to the Greater Raleigh Convention and Visitors Bureau.

Another 16 groups were about to sign contracts to hold events and are considering canceling or changing their minds, according to a spokesman for the visitors bureau. These groups could bring a combined 73,000 people and $24 million to the region.

The visitors bureau did not identify these 16 other groups in a report released by Denny Edwards, president and chief executive of the visitors bureau. But the report did say that one of the biggest hits would come if Raleigh lost its chance to host an unspecified sports tournament, one that the bureau said could bring in $4.5 million to the local economy.


This developing story has been updated multiple times.