HB2 makes recruiting businesses more challenging

Posted May 17, 2016

House Bill 2 (HB2)

— In the days and weeks following the adoption of House Bill 2, Commerce Secretary John Skvarla and his top lieutenants reached out to North Carolina-based companies and other firms as part of an effort to allay potential concerns.

"I think, more than anything, I was talking to people proactively or prophylactically to make sure they didn't have any concerns," Skvarla said. "My initiative has been to answer questions to try to give a complete explanation to the story, and in virtually every case, the response has been, 'Oh, I didn't know that,' or 'Oh, that's not so bad.'"

Skvarla was responding to businesses such as Fullsteam Brewery, whose owners asked to be removed from the Commerce Department's website, and Durham-based Biogen, a company that makes drugs to treat neurological, autoimmune and rare diseases.

"I share these positions with you both as leaders who care about North Carolina's reputation as a strong state for business and innovation, as we believe both have taken a hit with this bill," Biogen lobbyist Mike McBrierty wrote to Skvarla and other Commerce Department leaders.

Biogen is one of a group of companies to speak out forcefully against House Bill 2 after its passage.

McBrierty did not respond to requests for comment about his note, and Skvarla did not talk specifically about what, if any, follow-up conversation he might have had with the company.

"Nobody ever tells you that they've gone from on-switch to off-switch," Skvarla said, but he did say employers he had spoken with were relieved that they could decide how to handle their transgender employees.

"Different people are going to come to different conclusions, but at the end of the day, I don't think anybody wants to hurt anybody," Skvarla said.

Lawmakers drafted House Bill 2 in response to a Charlotte transgender nondiscrimination ordinance that would have required businesses and other public accommodations to allow transgender individuals to use the bathroom of their choice. House Bill 2 overturned that ordinance by prohibiting local governments from imposing such requirements on businesses. It also says that, in public buildings, transgender individuals must use the bathroom that corresponds to the sex on their birth certificate, even if it is at odds with how they look and present themselves.

The law, which was passed in a one-day emergency legislative session in March, also curbs the ability to sue for workplace discrimination and limits protections that local governments can extend to LGBT individuals, but the bathroom provisions have received the most discussion and focus.

Much of the response to the law has been public, such as when PayPal rescinded plans for a Charlotte expansion and Bruce Springsteen refused to put on a concert in Greensboro. In a new release Tuesday, Braeburn Pharmaceuticals said it would proceed with plans to open a manufacturing facility in Durham County, but only after receiving encouragement from both Gov. Pat McCrory and Attorney General Roy Cooper and not before expressing their displeasure with "the injustice of HB2."

Similar concerns from other businesses and industries are reflected in emails to Skvarla and other Commerce Department officials sent before and after the law's passage. Included in the correspondence obtained through a WRAL News records request was at least one Commerce official expressing his opposition to the law.

"I'm glad you sent this," John Hardin, executive director for the North Carolina Board of Science, wrote to McBrierty following the Biogen executive's note objecting to HB2. "I oppose it, for the reasons you outline below and others. I'm prepared to say that if asked."

Asked Monday to expound on his position, Hardin said, "My comment in the email stands as is."

Skvarla says Hardin's email reflected a "personal opinion" and insisted no other Commerce officials expressed a dissenting view.

Not all of the feedback Skvarla received was negative.

Shortly after House Bill 2's passage, members of the administration sent a fact sheet on the law developed by the Governor's Office to their contacts.

"I love this memo!!!" wrote Jim Anthony, chief executive of the commercial real estate firm Colliers International. "And I'm sick of leftist social and corporate bullies that seek to impose their will on the vast majority that oppose their agenda."

But it's clear House Bill 2 caused concern even before it was signed.

Guy Gaster, director of the North Carolina Film Office, wrote to other Commerce Department officials to point out that Georgia was facing potential boycotts from film companies thanks to a bill that would have curtailed LGBT rights in that state. Kim Genardo, the Commerce Department's deputy secretary for communications, urged Gaster to "not engage," and Skvarla later weighed in that the North Carolina and Georgia measures are different.

McCrory signed House Bill 2 soon after that exchange among Commerce Department officials. Georgia's governor would veto the bill in that state days later.

"Candidly, I just don't understand why the party of small government got involved in Charlotte's business, particularly with a costly special session for a bill with limited transparency which was signed quickly by the Governor," wrote Tom Waring, chief executive of Trailblazers Studio in Raleigh, wrote to Skvarla.

Waring and Skvarla had been discussing problems the film, television and commercial production business had encountered due to a change in how the state handles incentives for the industry.

House Bill 2 "further erodes our industry," Waring wrote at the time.

That assessment still holds, he said Tuesday.

"This just continues to drive business – our type of industry – out of the state," Waring said.

Trailblazers moved to North Carolina in 2002, and Waring said he had a choice of locations at the time. He choose the state due to its business climate and educational opportunities for his family. Were he making that decision today, he said, he would choose differently.

Asked if conversations about House Bill 2 were making his job harder, Skvarla said yes, but he insisted that much of the blowback was the result of a political campaign against McCrory. He touted the state's job growth and overall economic performance, noting that his department has announced 1,000 new jobs since House Bill 2 passed.

"I believe this is the most political thing I've ever seen in my life," Skvarla said.

Pressed as to whether job recruiting was becoming more difficult, he likened it to handling the coal ash spill in 2014 when he was environment secretary. An unexpected crisis, he said, never makes your job easier.

"Obviously, when you have a volcanic eruption or a nuclear holocaust, I guess it makes it harder," Skvarla said. "But the reality is, once the facts get completely displayed, it's been fun. Candidly, there's been a lot of relationships that I've renewed and made because it gave us an opportunity to connect with people."


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  • Hamilton Bean May 18, 2016
    user avatar

    All this noise about difficulty in recruiting businesses to NC, these businesses, entertainers, etc deciding not to come to NC because of HB2 really has nothing to do with the bill itself. Its about political correctness gone crazy. These companies could care less about the bill, but they think that by taking the actions they have taken will somehow enhance their standing with the members of the LGBTQxxx crowd and increase their level of business with them. The LGBTQxxx represents three tenths of one percent of the population--how much economic impact do you honestly think they will have on these companies? Compare that with the loss of business from the remainder of the states population who will no longer do business with these companies ( like Paypal) because they have taken the position they have.

  • Tom Waring May 17, 2016
    user avatar

    Demute Sainte: While there are some good rankings / statistics for businesses, they could be better were it not for HB2. But there are countervailing facts too. For example, corporate income tax rates were reduced by regressively redistributing the burden on consumers by adding sales taxes to more goods and services. In addition, in March 2016 the BLS ranks NC state unemployment rate of 5.5% at 37th; or we're in the worst / lowest quartile. So what may be great for employers may not be so great for individuals or employees.

  • Melvin Denis May 17, 2016
    user avatar

    Why do you think our State government can't see what is so obvious to it's people? They passed a law that can't be enforced and has no penalty and violates the laws of our federal government. They want it to go to court and waste more of taxpayer money to support there lawyer friends. Most of the legislature are probably lawyers and want a peace of the action. They know they passed a bad bill and won't admit it. Looks like they don't care about the majority of people they were elected to represent. The Democrats didn't care enough to show up for the vote and the Republicans don't want to admit they screwed up.

  • Jeffrey Derry May 17, 2016
    user avatar

    Really ? Cool story! Tell it again bro....

  • Demute Sainte May 17, 2016
    user avatar

    I'm confident that North Carolina's overall business climate, low taxes, strong workforce, and education systems along with established corporate presence will get past the politics of bathrooms. Because at the end of the day, it all comes down to money.

    Just look at how well NC ranks: