PayPal Drops $3.6 Million Center in N.C. Over Discrimination Law

Tuesday PayPal announced the canceling of their plans for a new facility in Charlotte. The online payment service have decided to nix their plans to open a global operations center in Charlotte, in response to the state's controversial new law.

PayPal is canceling its planned $3.6 million North Carolina operations center due to the state's new law preventing cities from banning discrimination against lesbian, gay, bisexual and transgender people, just two weeks after it announced the investment.

It becomes the second, and thus far largest, company to pull business out of the state, while others contemplate possible moves.

Similar political dramas are playing out nationally as multiple states vote on what proponents sometimes call religious freedom laws, laws gay rights advocates say foster discrimination. Mississippi passed a religious freedom law Tuesday. Georgia's governor vetoed a similar law late last month while Indiana passed one a year ago.

The laws are ratcheting up tensions between liberal-leaning businesses and conservative states, with hundreds of jobs and millions of dollars potentially at risk. Tech companies, who aggressively court specialized workers who are often younger, have been particularly vocal in criticizing the recent rash of laws.

In North Carolina, voting on its law and the backlash that followed have moved at lightening speed. 

On March 18, North Carolina governor Pat McCroryannounced San Jose, Calif.-based PayPal would build a new global operations center in Charlotte, N.C. The center would have employed 400 people. PayPal noted Charlotte's  "ties to the financial community and technology savvy talent pool" at the time.

Then on March 23, North Carolina passed a sweeping law that prevents cities and counties from passing rules preventing discrimination against gay, lesbian, bisexual and transgender people.

On Tuesday, PayPal CEO and president Dan Schulman announced the electronic payment company was withdrawing its plans to build the center because, he said, the new law perpetuates discrimination and violates the values and principles at the core of PayPal’s mission and culture.

Locating in a state "where members of our teams will not have equal rights under the law, is simply untenable," Schulman said.

The loss represents an economic setback to Mecklenburg County, where Charlotte is located. According to the Economic Development Partnership of North Carolina, PayPal would have invested over $3.6 million in Mecklenburg County by the end of 2017. The center was anticipated to yield a payroll impact of nearly $20.4 million per year for Mecklenburg and surrounding counties.

The company is now looking for an alternative location for its operations center. McCrory’s office did not immediately respond to an email seeking comment.