PayPal headquarters in San Jose. PayPal

The company has pulled out just two weeks after announcing plans to bring 400 jobs to the city.

Two weeks ago, PayPal announced plans to move into Charlotte, North Carolina. But in the wake of the decision by state lawmakers to wipe out anti-discrimination protections across the state, PayPal has reversed course.

On Tuesday, PayPal announced that the company has withdrawn expansion plans that would bring more than 400 jobs to Charlotte. The payment-processing company specifically cited H.B. 2, the controversial law passed by the North Carolina state legislature during an emergency session in March, as the reason for nixing the new operations center.

“The new law perpetuates discrimination and it violates the values and principles that are at the core of PayPal’s mission and culture,” reads a statement on PayPal’s website. “As a result, PayPal will not move forward with our planned expansion into Charlotte.”

H.B. 2 preempts North Carolina cities such as Charlotte from passing ordinances that protect LGBT residents from discrimination or that ensure access for transgender people to public restrooms that correspond to their gender identity. The law further preempts cities from passing minimum-wage ordinances.

The law prompted a swift response from North Carolina’s business community and human-rights activists alike. Dow Chemical Company and Biogen were among the North Carolina-based businesses that objected to the law; they were joined by Google, Apple, American Airlines, and others. The ACLU, Lambda Legal, and Equality N.C. have sued the state. Various municipal governments, including those of Washington, D.C., San Francisco, and New York City, have banned official travel to North Carolina.

PayPal’s withdrawal may be the biggest hit that the state has taken yet over the new law. North Carolina Governor Pat McCrory, who signed H.B. 2 on March 23, appeared victorious in a press conference with PayPal senior vice president John McCabe just days before. PayPal’s promise of hundreds of jobs and millions in capital was greeted by Charlotte leaders as a significant step into the financial-tech sector and 21st-century industry.

“North Carolina is on fire right now and job creation in Charlotte is leading the way,” Governor McCrory told reporters on March 18.

Tuesday, however, PayPal made clear in a statement that Charlotte—and North Carolina—lacks the environment the company wants for its employees:

Our decision is a clear and unambiguous one. But we do regret that we will not have the opportunity to be a part of the Charlotte community and to count as colleagues the skilled and talented people of the region. As a company that is committed to the principle that everyone deserves to live without fear of discrimination simply for being who they are, becoming an employer in North Carolina, where members of our teams will not have equal rights under the law, is simply untenable.

North Carolina is among several states whose conservative legislatures and governors have passed laws preempting the rights of more-liberal cities to pass local ordinances protecting LGBT rights, creating local environmental regulations, or setting minimum wages. At least 19 states have passed laws blocking local wage ordinances.

Some states may be watching the economic fallout in North Carolina with apprehension. Late last month, Georgia Governor Nathan Deal vetoed a “religious liberty” bill criticized by business leaders and human-rights activists across the state.

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