HB2, North Carolina’s bathroom bill, was a state law signed on March 23, 2016 that required people to use restrooms in government buildings matching the sex listed on their birth certificate, barred cities and counties from passing their own LGBTQ nondiscrimination ordinances, and stripped workers of the right to sue employers for discrimination in state court. It drew a federal lawsuit from the U.S. Department of Justice, cost the state billions in canceled business, and was partially repealed about a year later by House Bill 142.
Why Charlotte’s Ordinance Set It Off
In February 2016, the Charlotte City Council voted 7-4 to expand the city’s nondiscrimination ordinance to cover sexual orientation and gender identity in public accommodations. The ordinance let transgender people use restrooms matching their gender identity in businesses open to the public.
State Republican leaders called a special session within days. The General Assembly convened, passed HB2 in a single day, and Governor Pat McCrory signed it that evening.1North Carolina General Assembly. House Bill 2 – Session Law 2016-3
What HB2 Required
Restrooms in Government Buildings
HB2 required every government-owned building in the state to designate its multi-person bathrooms, locker rooms, showers, and changing areas for use based on “biological sex,” which the law defined as “the physical condition of being male or female, which is stated on a person’s birth certificate.”2North Carolina General Assembly. House Bill 2 – Ratified Bill The rule covered state executive agencies, public universities, community colleges, local school districts, the courts, and every other political subdivision.
Agencies could offer single-occupancy restrooms as an accommodation, but that option was not a general workaround. Even where single-stall facilities existed, the law still forbade anyone from entering a multi-person facility designated for the opposite biological sex.2North Carolina General Assembly. House Bill 2 – Ratified Bill
Because the standard was what appeared on a birth certificate, the practical effect turned on how hard that document was to change. North Carolina required proof of sex reassignment surgery, supported by either a notarized surgeon’s statement or a court order, before the state registrar would amend the sex marker. Transgender residents who had not had surgery, or could not afford it, were effectively locked out of restrooms matching their gender identity in any government building.
Blocking Local Nondiscrimination Ordinances
HB2 created a statewide list of protected classes for public accommodations and declared that no city or county could add to it. The recognized classes were race, religion, national origin, color, age, disability, and biological sex. Sexual orientation and gender identity were pointedly left off.1North Carolina General Assembly. House Bill 2 – Session Law 2016-3
The preemption nullified Charlotte’s ordinance immediately along with any similar local protections elsewhere. Only the General Assembly could decide which groups received civil rights protection in North Carolina.
Employment and Wage Provisions
A quieter section of HB2 eliminated the ability of workers to file wrongful discharge lawsuits in state court. Before the law, North Carolina employees fired for discriminatory reasons could sue under a public policy exception recognized by state courts. HB2 added language stating that the state’s anti-discrimination article “does not create, and shall not be construed to create or support, a statutory or common law private right of action.”1North Carolina General Assembly. House Bill 2 – Session Law 2016-3 That cut off state court remedies for anyone fired because of race, religion, sex, age, or national origin, leaving federal administrative complaints and federal court as the only options.
The backlash was strong enough that the legislature passed a partial fix four months later. House Bill 169, signed in July 2016, restored the state court claim but shortened the filing deadline from three years to one and made the change retroactive to March 23, 2016.
HB2 also barred local governments from setting labor standards for private employers. Cities and counties could no longer require public-project contractors to pay above the state minimum wage, mandate paid sick leave, or impose other benefit requirements on private businesses.
The Federal Lawsuit
On May 9, 2016, the U.S. Department of Justice sued North Carolina, arguing that HB2 violated Title VII of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, and the Violence Against Women Reauthorization Act of 2013.3U.S. Department of Justice. Justice Department Files Complaint Against the State of North Carolina to Stop Discrimination Against Transgender Individuals
The DOJ’s core position was that HB2 forced government employers to treat transgender employees differently from other employees in an essential condition of employment, which the department argued was sex discrimination under Title VII. For public schools and universities, compliance with HB2 simultaneously violated Title IX, putting an estimated $4.5 billion in federal education funding at risk. The complaint also named the University of North Carolina and the state’s Department of Public Safety.3U.S. Department of Justice. Justice Department Files Complaint Against the State of North Carolina to Stop Discrimination Against Transgender Individuals The dispute continued until HB2 was repealed.
What It Cost the State
An Associated Press analysis estimated that HB2 would cost North Carolina more than $3.76 billion in lost business over twelve years. Companies pulled projects within days of the signing. PayPal canceled a 400-job operations center in Charlotte. CoStar Group scrapped a 730-job facility in the same city, moving the project and a $250 million investment to Richmond, Virginia. Deutsche Bank abandoned 250 jobs planned for the Raleigh area. Across all canceled or relocated projects, the state missed out on more than 2,900 direct jobs.
Sports and entertainment losses added up alongside the corporate ones. The NBA moved the 2017 All-Star Game out of Charlotte. The NCAA announced that North Carolina would not be considered for championship events from 2018 through 2022 unless the law changed, affecting more than 130 bids from state cities and schools. Canceled conventions, concerts, and games cost the state more than $196 million according to local tourism officials.
The 2017 Repeal and What It Kept
On March 30, 2017, the General Assembly passed House Bill 142 and Governor Roy Cooper signed it the same day. HB142 repealed HB2 outright, and it also repealed HB169, the employment litigation fix from the previous summer.4North Carolina General Assembly. House Bill 142 – Session Law 2017-4
The repeal was partial in important ways. HB142 removed the birth certificate bathroom mandate but did not hand bathroom policy back to local governments. The new law declared that only the state legislature could regulate access to multi-person restrooms, showers, and changing facilities in government buildings. No state agency, local school board, or city council could adopt its own policy without an act of the General Assembly.4North Carolina General Assembly. House Bill 142 – Session Law 2017-4
HB142 also imposed a moratorium that blocked local governments from enacting or amending ordinances on private employment practices or public accommodations until December 1, 2020. Cities like Charlotte could not reinstate the LGBTQ protections that had triggered HB2 in the first place. The moratorium lasted more than three and a half years.
Where Things Stand in North Carolina Now
When the moratorium expired on December 1, 2020, cities moved quickly. Within weeks, Charlotte, Durham, Greensboro, Chapel Hill, Carrboro, Hillsborough, and other municipalities passed nondiscrimination ordinances covering sexual orientation and gender identity in employment and public accommodations. Asheville, Buncombe County, Orange County, and other jurisdictions followed, in some cases extending protections to housing.
These ordinances are local, not statewide. North Carolina still has no state law prohibiting discrimination based on sexual orientation or gender identity in employment, housing, or public accommodations. The Human Rights Campaign’s 2024 State Equality Index placed North Carolina in its lowest category, “High Priority to Achieve Basic Equality.” Whether these protections apply to you depends on which city or county you live or work in.