How Brands Became the Most Powerful Advocates in Today’s Battle for LGBT Equality

They're leading the charge for change, but will states concede?

This spring, North Carolina and Mississippi came under fire for passing laws that many felt were discriminatory against gay, lesbian and transgender residents.

In addition to being lambasted by LGBT advocates, the laws—North Carolina's House Bill 2 and Mississippi's House Bill 1523—have also been criticized by much of corporate America, with with hundreds of brands calling for their repeal and even scaling back operations in those states.

When brands pressure states to embrace progressive ideals, it often results in negative economic impact for those states, as evidenced already in the travel and tourism industries in North Carolina and Mississippi. Historically, such situations can have a long-lasting economic impact for states, with the current examples likely becoming iconic case studies in brand backlash to anti-progressive social policies.

The boycotts already are having an economic impact. According to Human Rights Campaign, North Carolina has lost more than half a billion dollars in economic activity from companies canceling—or reconsidering—plans to come to the state and in canceled conventions, concerts and lost tourism dollars.

The Mississippi Hospitality and Restaurant Association also is reporting hotel and convention cancellations as a result of House Bill 1523.

And although Target is currently facing consumer boycott threats on the heels of its declaration that transgender people could use the restroom of their choice, brands generally stand to benefit in terms of customer perception when they weigh in on these issues, experts say.

Background of the bills

In March, Mississippi signed into law the Religious Liberty Accommodations Act, which allows individuals or organizations to refuse service or support to gays, lesbians, same-sex couples or transgender residents "in a manner consistent with a sincerely held religious belief or moral conviction." 

Mississippi's law specifically allows employers to fire or refuse to hire someone whose sexual orientation or transgender status is opposed by the company's religious beliefs. It also protects adoption groups, landlords and wedding-based businesses (such as photographers and disc jockeys) that refuse to work with LGBT clients.

Also in March, North Carolina passed its so-called "bathroom bill" that requires the state's residents to use public restrooms associated with their birth gender.

"I haven't read a national newspaper in more than a month that hasn't had a story about this, and it's making our state look terrible," said Brad Brinegar, CEO of Durham, N.C.-based agency McKinney, which launched two campaigns against the law including FlushHB2, in which it printed the "bathroom bill" on toilet paper and encouraged people to flush it—literally.

"The fundamentals beneath the surface are reprehensible," Brinegar continued. "We're hoping that taking a stand only attracts better people and better business relationships."

The brand backlash

More than 200 corporate CEOs agree with Brinegar's perspective, signing a letter in April with LGBT advocacy groups Human Rights Campaign and Equality NC calling for the repeal of House Bill 2. Seventy-five CEOs and business leaders also signed an open letter with Human Rights Campaign calling for Mississippi governor Phil Bryant to repeal House Bill 1523.

The North Carolina bill's proponents, meanwhile, argue that the law was designed to protect women and children from sexual predators in public restrooms. In April, 700 people rallied at North Carolina's state Capitol building in support of HB2, including members of the Christian Action League of North Carolina and the NC Family Policy Council. The two organizations launched Keep NC Safe, a campaign supporting HB2, which included a letter signed by 300 North Carolina-based small business leaders in support of it. 

Tech brands led the charge

On the opposition front, Facebook and Google, which have data centers in North Carolina, and Amazon, which has a large distribution center there, were the first brands to approach Equality NC about the letter opposing HB2. The advocacy group first put together the letter on behalf of those companies, and then other brands signed on, according to Matt Hirschy, Equality NC's director of advancement.