Politics & Government

PayPal CEO says company ‘just couldn’t proceed’ with Charlotte project

PayPal CEO Dan Schulman speaks at a press conference last month in Havana on entrepreneurship and opportunity between Cuba and America. On Tuesday, PayPal said it was canceling plans to open a Charlotte operations center because it opposes North Carolina’s new law that limits the legal protections of LGBT individuals.
PayPal CEO Dan Schulman speaks at a press conference last month in Havana on entrepreneurship and opportunity between Cuba and America. On Tuesday, PayPal said it was canceling plans to open a Charlotte operations center because it opposes North Carolina’s new law that limits the legal protections of LGBT individuals. TNS

PayPal’s CEO said Tuesday he was “surprised” by North Carolina’s new law limiting protections for LGBT individuals, a move he said gave him no choice but to scrap plans for a global operations center that would have employed 400 in Charlotte.

“We have been deliberating this decision for the past week or so,” Dan Schulman told the Observer. “But with the passage of the bill, it really goes against the values of our company and we just couldn’t proceed forward.”

His comments came after the San Jose, Calif.-based payments company earlier in the day announced it was withdrawing plans for the Charlotte center over House Bill 2. Gov. Pat McCrory signed the bill into law last month, in response to a Charlotte nondiscrimination ordinance that would have allowed transgender people to use the bathroom corresponding to the gender with which they identify.

In Charlotte, PayPal’s news Tuesday was viewed as a setback for efforts to grow the city’s financial-technology industry, which remains a smaller player than similar hubs in Silicon Valley and New York. PayPal, a Silicon Valley giant known for processing online payments, would have given a boost to Charlotte’s tech image, industry officials said.

“One of the advantages to having a big brand like PayPal to come into Charlotte is it allows Charlotte to be known as an innovative payments hub much more so than today,” said Aditya Khurjekar, CEO of Charlotte-based Let’s Talk Payments, a website that tracks the industry.

Bank of America, American Airlines and other large companies with operations in Charlotte have also expressed opposition to the law. But PayPal marks the first to call off a Charlotte expansion project in response to the bill.

Schulman said he regrets that PayPal had to pull its Charlotte plans, which the company unveiled last month before HB2 was signed. McCrory attended that uptown Charlotte announcement, calling PayPal at the time “another prominent name” being added to the list of tech businesses with major operations in North Carolina.

“We hope that the governor will reconsider and repeal HB2,” Schulman said, “and if he does so that Charlotte is obviously a community that we were looking forward to becoming an employer in.”

PayPal had reached out to the governor’s office before making its announcement Tuesday, Schulman said, but he declined to provide specifics.

Schulman described Charlotte as a vibrant city and praised the skill sets of its workers.

“It has a number of feeder pools from a high-quality education system in North Carolina,” he said. “And we carefully considered numerous locations across the country and chose Charlotte. I think that says a lot about how we felt about both the city and the state.”

HB2 gave him no choice, he said.

“It is absolutely the right decision for PayPal given the current set of laws that are in North Carolina,” said Schulman.

In a 2008 New York Times column, Schulman wrote that his grandfather was a union organizer and that his mother once took him to a civil rights demonstration in Washington in his stroller.

“I was born with social activism in my DNA,” Schulman wrote.

Financial technology-industry officials in Charlotte called Tuesday’s news disappointing.

“As an industry player, what helps me or hurts me is how is Charlotte perceived,” Khurjekar said. “Having a name like PayPal here, of course it’s a big deal.”

Michael Praeger, CEO of Charlotte-based payment software firm AvidXchange, said in a statement that he had been looking forward to PayPal “helping to build an even stronger technology presence in Charlotte.”

“I am hopeful that the city and state can work together as quickly as possible to come to a resolution that will continue to encourage innovation and diversity in the Queen City,” Praeger said.

Vermont Gov. Peter Shumlin, a Democrat, offered his state as a site for PayPal’s expansion in response to the company’s announcement. In a statement Tuesday, Shumlin said he had written to Schulman pointing out that Vermont has a “proud history of non-discrimination and protecting the rights of all citizens.”

Schulman said he hasn’t decided where PayPal will now place the center. The company had considered expanding in Arizona and Florida before picking North Carolina.

“We’re looking across the country in terms of the various criteria that we have for locating a North America global operations center,” he said. “Amongst those criteria are states that welcome all communities which none of our employees need to feel that they can potentially be discriminated against.”

The Associated Press contributed.

Deon Roberts: 704-358-5248, @DeonERoberts

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