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  • HB2 may have only governed North Carolina, but is spurred a national controversy resulting in the NBA pulling All-Star Weekend from Charlotte in 2017. With the league hosting in the state again this year, has there been any meaningful change on the law?
By Michael McCann
February 15, 2019

When the City of Charlotte hosts the NBA All-Star game on Sunday, two years will have passed from when city was supposed to be the host. The delay reflects NBA commissioner Adam Silver adeptly utilizing the league’s financial heft and social influence to push for change to a controversial law.

The All-Star Game and the Bathroom Bill

On June 23, 2015, Silver was joined by North Carolina Governor Pat McCrory, Charlotte Hornets owner Michael Jordan and other distinguished persons from the Tar Heel state at a press conference in Charlotte’s Time Warner Cable Arena. It was there when Silver revealed that the Charlotte would host the All-Star game in February 2017.

"As a thriving city with a proud basketball tradition and a deep passion for the game,” Silver reflected. “The city of Charlotte is a terrific All-Star destination.”

Nine months later, this plan would go awry.

On March 23, 2016 the North Carolina General Assembly voted to approve the Public Facilities Privacy and Security Act, better known as House Bill 2 (HB2) or simply “the Bathroom Bill.” McCrory, who had previously stood next to Silver, signed the bill into law that evening. In doing so, McCrory ensured that North Carolina would become the first and only state to make it illegal for a person to use a bathroom different from the gender listed on that person’s birth certificate.

HB2 was a legislative response to a municipal ordinance that the City of Charlotte had recently passed. This municipal ordinance, which never went into effect due to preemption by HB2, amended Charlotte’s code so that sexual orientation, gender expression and gender identity would be legally protected characteristics. Such protection would have governed businesses, public areas and—of particular controversy at the time—bathrooms. The ordinance warranted that transgender persons could use the bathroom associated with the gender with which they identified.

Charlotte’s ordinance faced intense criticism from some. Famed evangelist Billy Graham denounced it as “wicked” and “filthy.” Critics also expressed fear that transgender persons using bathrooms different from the ones on their birth certificate could pose safety concerns. One Charlotte resident worried, “I’m not scared of transgenders, but sexual predators will see this as a chance for fresh victims.”

Others viewed Charlotte’s ordinance as promoting human dignity and countering discrimination. Safety fears related to transgender persons’ access to bathrooms also lacked empirical support. Indeed, critics of Charlotte’s ordinance couldn’t point to a record of transgender-related crimes in bathrooms because there was no such record. To that point, a recent study led by Amira Hasenbush of UCLA School of Law’s Williams Institute found no statistically-significant evidence that transgender people who use the gender with which they identified have led to safety or privacy violations. The study also concluded that passage of bathroom laws is “not related to the number or frequency of criminal incidents in these spaces.”

Opponents of the Charlotte’s ordinance won the day in the North Carolina assembly. State legislators proposed HB2 and then advanced it to passage. Among its provisions, HB2 required public schools and government facilities with single-sex bathrooms to only allow usage by persons of the appropriate “biological sex.” HB2 defined “biological sex” as “the physical condition of being male or female, which is stated on a person's birth certificate.” HB2 also preempted any municipal and local ordinances that would conflict with HB2.

As a result, HB2 made it illegal for transgender persons who identified with the sex not stated on their birth certificate to use many types of bathrooms. It also prevented Charlotte and other municipalities from implementing ordinances that would allow transgender persons to use the bathroom assigned to the gender with which they identified.

Legal commentators noted assorted inconsistencies between HB2 and Title IX, a federal law that, among other things, outlaws gender discrimination in schools. Title IX has been interpreted to prohibit discrimination against transgender students in public schools. Nonetheless, North Carolina put its law into effect.

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The NBA and other businesses respond to HB2 through the power of cancellation

HB2 may have only governed North Carolina, but it spurred a national controversy. Various out-of-state businesses and performers de-committed from earlier pledges to bring jobs and events to North Carolina. PayPal, for instance, rescinded its plan to open a center in Charlotte that would have provided more than 400 jobs. At the time, CEO Dan Shulman stressed that HB2 “perpetuates discrimination” and “violates the values and principles” of his company. Meanwhile, Bruce Springsteen cancelled a show in Greensboro. At the time, the legendary singer lamented that “some things are more important than a rock show and this fight against prejudice and bigotry—which is happening as I write—is one of them.”

The loss of economic activity for North Carolina was real and measurable. In March 2017, the Associated Press reported that the state stood to lose $3.8 billion in forgone business opportunities due to HB2.

Among the more notable lost revenue opportunities were those found in the sports industry. Economic activity generated through the NBA was at the top of the list.

Three days after McCrory signed HB2 into law, the NBA issued a stern rebuke of the law as incompatible with its basic values. The league stressed that HB2 betrayed its commitment to “creating an inclusive environment for all who attend our games and events.” The NBA also voiced “deep concern” that “this discriminatory law runs counter to our guiding principles of equality and mutual respect.” Of perhaps greatest alarm to both North Carolina lawmakers and Charlotte officials, the league admonished that it might move the All-Star game if the state failed to repeal HB2.

After repeated warnings went unheeded, the NBA announced in July 2016 that it was pulling the All-Star game from Charlotte. It would instead be played in New Orleans’s Smoothie King Center. The NBA explained that league officials would only agree to host an All-Star game where “all patrons—including members of the LGBT community—feel welcome” and that they “do not believe we can successfully host our All-Star festivities in Charlotte in the climate created by HB2.”

The NBA’s decision was expected to cost Charlotte $100 million in anticipated revenue. McCrory, for his part, was decidedly unpleased with both the NBA and Silver. He blamed “the sports and entertainment elite” as well as “the liberal media”, “the left-wing special interest groups” and “the selective corporate elite.” McCrory further argued that the NBA’s decision reflected a “misrepresentation” of laws that “maligned the people of North Carolina simply because most people believe boys and girls should be able to use school bathrooms, locker rooms and showers without the opposite sex present.”

Joe Robbins/Getty Images

The NCAA and ACC follow the NBA’s lead on HB2

The NBA’s willingness to immediately and forcefully challenge North Carolina over a controversial law was noticed by other leagues and sports organizations. It likely galvanized them to act.

In late April, the NCAA modified its application procedure for venues that sought to host NCAA championship games. Most notably, venues had to answer a questionnaire about the bathroom policies for both the venue and for the municipality and state in which the venue is located. The NCAA’s response to HB2 was consistent with the organization’s previous statements in opposition to state laws that it believed undermined an “inclusive environment.” For instance, in 2015, NCAA president Mark Emmert rebuked Indiana’s Religious Freedom Restoration Act. This law allows individuals and businesses to invoke religious freedom as a reason to not sell goods or provide services to customers (the extent to which Indiana’s law supplements existing federal law on religious freedom is a matter of legal debate). Emmert expressed “concern about how this legislation could affect our student-athletes and employees.”

Five months after issuing its bathroom questionnaire, the NCAA pulled championship games—including 2017 men’s basketball tournament—that were set to be played in North Carolina. The NCAA, which took action two months after the NBA pulled the All-Star game, identified several reasons for its decision. One key rationale was the NCAA’s objection to North Carolina invalidating Charlotte’s ordinance that had been designed to prohibit discrimination against transgender persons. The NCAA also made clear that its “championships and events must promote an inclusive atmosphere for all college athletes, coaches, administrators and fans.” One estimate indicates North Carolina stood to lose approximately $18 million in projected revenue from the loss of those NCAA games.

Even more financially consequential to the North Carolina was the Atlantic Coast Conference’s decision to cancel its major games in the state. After watching the NBC and NCAA take action, the ACC pulled 12 championship games from North Carolina. The conference highlighted HB2’s incompatibility with the ACC’s commitment to inclusion and non-discrimination.

The ACC gained support from prominent coaches of colleges in North Carolina. For instance, UNC coach Roy Williams described HB2 as both “stupid” and “ridiculous.” The ACC’s decision would prove costly to North Carolina: the state was projected to lose $38 million due to the loss of ACC championship games.

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Silver’s track record of action and sponsorship considerations

Silver’s willingness to carry through on a threat to pull the All-Star game should have been known to North Carolina’s business and political leaders. To the extent they believed he was bluffing, they clearly hadn’t done their homework.

Under Silver’s leadership, the NBA has shown little tolerance for bigotry. It has also displayed a willingness to take extraordinary steps.

Silver had only been commissioner for two months when Los Angeles Clippers owner Donald Sterling’s racist comments were published in an April 2014 TMZ story. After four days of fact-finding and analysis, Silver responded decisively. The commissioner permanently banned Sterling from the NBA—an unprecedented penalty for an owner and one that was sure to bring about litigation. Silver also urged owners of the other 29 franchises to vote Sterling out. Three months later, Silver, with Shelly Sterling’s involvement, successfully engineered Sterling’s removal as owner of the Clippers. Also, for all practice purposes, Silver—an attorney by trade—thwarted and outmaneuvered Donald Sterling’s multiple legal attempts to stop the expulsion.

Silver also ensured that an investigation into sexual harassment and related workplace misconduct with the Dallas Mavericks be thorough and extensive. The investigation, launched after publication of an SI investigative report by Jon Wertheim and Jessica Luther in February 2018, led to Mavericks owner Mark Cuban donating $10 million (four times the maximum amount Silver could have fined Cuban under the NBA’s constitution) to organizations that deter and prevent mistreatment of women.

The league has also pursued policies that are designed to curb discrimination. For instance, the NBA has collaborated with LeanIn.org to promote leadership opportunities for women with NBA teams. Further, the NBA’s statement on diversity and inclusion emphasize that the league provides an “inclusive workplace.”

Silver has also earned goodwill with players and sponsors through his deft handling of social issues. Sterling’s remarks led LeBron James, Stephen Curry and NBA stars to threaten to boycott playoff games unless Sterling was ousted. Silver listened to their call and took action accordingly.

Also, while the NFL has badly struggled to handle the social and legal implications of players who kneel during the playing of the national anthem, the NBA hasn’t encountered those issues under Silver’s watch. This is in spite of the fact that NBA requires players to stand during the playing of the national anthem. All of the league’s players, regardless of their race, national origin or political views, have adhered to the anthem rule during Silver’s tenure (one player, Denver Nuggets guard Mahmoud Abdul-Rauf, refused to stand for the anthem in 1996, when David Stern was commissioner). One likely reason for players’ uniform adherence is that Silver has encouraged players to be active socially and politically while not playing. He has also described players locking arms during the anthem as “respectful unity.”

Silver has been able to thread a needle between the interests of players, fans, broadcast partners and sponsors. In ousting Sterling, Silver responded to both players threatening to boycott and major Clippers’ sponsors, including Virgin America and Mercedes-Benz, threatening to end their commercial association. In relocating the All-Star game out of Charlotte, Silver took account of viewpoints from numerous constituencies, including broadcast companies and many fans.

Michelle Farsi/NBAE via Getty Images

North Carolina changes its law and the NBA All-Star game returns

As referenced above, the NBA was only one of many entities that took business away from North Carolina in response to HB2. However, among sports organizations, the NBA was the first to such take such a major step as removal of a nationally-televised game.

The collective pressure worked, at least in part. On March 30, 2017, a new governor, Roy Cooper, signed House Bill 142 (HB142) into law. HB142 repealed HB2 and eliminated the controversial bathroom language. As a result, North Carolina law no longer requires single-sex bathrooms to only permit usage by persons of the appropriate “biological sex.”

In other respects, HB142 fell short of what critics of the bathroom bill had demanded. Most importantly, HB142 forbids Charlotte and other municipalities and towns from passing anti-discrimination ordinances related to public accommodations— including bathrooms—until 2020. HB142 also makes clear that questions related to single-sex bathrooms are to be determined by the state, and not by cities and towns. Therefore, Charlotte’s 2016 ordinance, as discussed above, remains unenforceable. Likewise, while North Carolina’s current legal regime for bathrooms doesn’t expressly discriminate on the basis of sexual identity, it neither offers protection nor allows cities and towns to offer safeguards. The state of bathroom access law in North Carolina, then, is like it was before Charlotte’s ordinance and HB2.

On May 24, 2017, Silver announced that the All-Star game would return to Charlotte in 2019. Silver offered a lukewarm assessment of HB142 and acknowledged its short-comings. However, he also stressed that HB142 “eliminates the most egregious aspects” of HB2 and that the NBA would collaborate with Hornets’ leadership to apply “a set of equality principles to ensure that every All-Star event will proceed with open access and anti-discrimination policies.”

As states grapple with controversial social topics in the years ahead, the NBA and other leagues will face choices on whether to exert their influence and leverage. The NBA’s response to “the Bathroom Bill” will serve as an instructive illustration of when a league decides to use its power.

Michael McCann is SI’s legal analyst. He is also Associate Dean of the University of New Hampshire School of Law and editor and co-author of The Oxford Handbook of American Sports Law and Court Justice: The Inside Story of My Battle Against the NCAA.

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