North Carolina is taking a beating in the press in recent days. After the state legislature passed a bill some say is prejudicial against the LGBT community, many national brands asked the governor to repeal the law. Now, Starbucks has joined them.
Initially Governor Pat McCrory said the outcry after the bill “demonized” North Carolina, saying the state had become the target of a “vicious smear campaign”. Immediately after making this statement, corporate interests turned up the heat on the governor. Joining Starbucks in publicly opposing the new law were about 100 companies including Wells Fargo, Barnes & Noble, eBay, Kellogg, Citibank, Uber, American Airlines and Hilton.
The language of the letter makes it clear. These companies don’t believe North Carolina’s law reflects the values of their companies or the majority of North Carolina residents. The letter could represent a major financial problem for the governor and legislator … and it’s just getting worse.
Shortly after the letter was received by the governor, North Carolina’s attorney general said they won’t defend the law. Now the state will have to spend extra money to hire outside council if they wish to defend the law in court.
While North Carolina is not the only state embroiled in a similar situation – Georgia and Missouri also face similar issues – the lockstep political response in North Carolina places that state front and center in the PR firestorm this is sure to ignite. This position will test the resolve of the elected officials.
Despite the language in the corporate letter, the law and sentiment are popular in much of North Carolina. That means many legislators may have to choose between angry constituents at election time or angry corporate interests right now. It’s a difficult position to manage, and will become more so as this issue continues to make headlines.
One thing is certain, the varied interests involved will not allow this issue to go away any time soon. The governor has agreed to meet with members of the LGBT community, but that photo op won’t change the basic dynamics of the situation. If he backs off on this issue, his constituents will feel betrayed, and if he doesn’t, that decision could cost the state major business losses…the governor can afford neither outcome.
Jonah Engler is a financial expert from NYC.
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