PayPal pulls plug on North Carolina unit to protest anti-gay law

Last Updated Apr 5, 2016 1:10 PM EDT

Two weeks after unveiling plans to open a global operations center in Charlotte, North Carolina, that would employ more than 400 people, PayPal says it will instead look elsewhere due to a new state law that blocks anti-discrimination rules for gay and transgender people.

The legislation enacted by the state "invalidates protections of the rights of lesbian, gay, bisexual, and transgender citizens and denies these members of our community equal rights under the law," PayPal said in a statement on Tuesday. "Becoming an employer in North Carolina, where members of our teams will not have equal rights under the law, is simply untenable."

The law, approved by the state's Republican-controlled legislature and Gov. Pat McCrory, came in response to a Charlotte City Council ordinance approved in February that would have extended protections to gays and lesbians, as well as bisexual and transgender people, at hotels, restaurants and stores. Charlotte also would have allowed transgender people to use restrooms aligned with their gender identity.

The law blocked Charlotte's rules and prevented other local governments from approving similar ordinances.

The online payments company is joining a growing list of companies that oppose the law, with Apple (AAPL), Google (GOOGL), American Airlines (AAL) and Bank of America (BAC), as well as the state's professional basketball team, among those calling for a repeal.

Atlanta's mayor has reportedly banned taxpayer-funded travel to North Carolina over the law, following similar actions by officials in states including New York, Connecticut, Minnesota and Washington.

"There's no doubt there is a well-coordinated, national campaign to smear our state's reputation after we passed a commonsense law to ensure no government can take away our basic expectations of privacy in bathrooms, locker rooms and showers," Josh Ellis, McCrory's communications director said Thursday in a statement.

"Governor McCrory appreciated the opportunity to sit down and deal with these complex issues through conversation and dialogue, as opposed to political threats and economic retaliation," Ellis added of the governor's meeting with LGBT leaders.

The effort to get North Carolina to rescind the law, signed by McCrory on March 23, came as Mississippi's governor signed a law that lets public and private businesses refuse service to gay couples based on the employers' religious beliefs.

Nathan Deal, Georgia's two-term governor, recently vetoed a bill offering barriers to same-sex marriage after dozens of corporate heavy-hitters urged him to do so.