A controversial law in North Carolina that places strict limits on the protection granted to the LGBT community has been declared a “national embarrassment” by US policy-makers. And now the business world has joined in the condemnation.

This week, more than 80 executives from some of the world’s leading tech companies – including Facebook, Google, Apple, Yahoo and Salesforce – wrote an open letter saying they were “disappointed in the decision to sign this discriminatory legislation into law”. The law bans transgender people from using bathrooms or locker rooms that are different from the gender on their birth certificates. It also prevents local governments from passing anti-discrimination laws to protect LGBT people.

The bill passed 32-0 in the Senate after all Democrats walked out in protest. “This is a direct affront to equality, civil rights and local autonomy,” the Senate Democratic leader Dan Blue said shortly after. And as the open letter notes, it’s also bad for business.

“Such laws are bad for our employees and bad for business. This is not a direction in which states move when they are seeking to provide successful, thriving hubs for business and economic development.” Some of North Carolina’s biggest tech employers also signed the letter, including IBM, Cisco and Microsoft, which between them employed almost 13,000 people in the state in 2014.

Research suggests countries and industries pay a big economic cost when they discriminate against the LGBT community. For example, a 2014 study from the World Bank estimated that homophobia was costing India up to 1.7% of its potential GDP.

Image: World Bank


It’s not the first time the business community has given its backing to LGBT rights. As Chad Griffin of the Human Rights Campaign wrote on this blog, hundreds of businesses wrote letters of support to the US Supreme Court ahead of a ruling that legalized same-sex marriage. In fact, as Griffin points out, business leaders are often a few steps ahead of legislators: “Around the world, businesses have far outpaced lawmakers in embracing the basic premise that the hard work and talents of all their employees – regardless of who they are or whom they love – are rewarded fairly in their workplaces.”

In North Carolina’s neighbouring state of Georgia, a similar bill was vetoed this week. The legislation would have allowed businesses and non-profits to ignore equal treatment laws if they felt they went against their religious convictions. A number of companies, including Time Warner Cable, Apple, Coca-Cola, Delta, Intel and Walt Disney said they would pull their operations out of the state if the bill passed. “Disney and Marvel are inclusive companies, and although we have had great experiences filming in Georgia, we will plan to take our business elsewhere should any legislation allowing discriminatory practices be signed into state law,” the world’s largest entertainment company said in a statement.