More GOP-led states risk corporate backlash like Georgia’s

The corporate backlash against Georgia’s new voting law is putting other states on alert.

Texas, Florida and Arizona are among the Republican-led states considering similar legislation, setting the stage for potential clashes with companies headquartered there.

Industry experts are closely watching how things unfold in Georgia to see whether there is a boycott and loss of business similar to what North Carolina experienced with regard to its “bathroom bill” from 2016. That picture became clearer on Friday when Major League Baseball announced it won’t hold this year’s All-Star Game in Georgia as initially planned.

Companies in Texas are already weighing in on a bill making its way through the state legislature that would limit early voting hours and broaden the authority of partisan poll watchers.

American Airlines came out against the legislation, passed by the state Senate on Thursday, while Dallas-based Southwest Airlines said in a statement that “the right to vote is foundational to our democracy” but did not oppose the measure outright.

“This is not good enough, @SouthwestAir. Do you oppose these extreme voter suppression bills SB7/HB6?” tweeted Julián Castro, the former Democratic mayor of San Antonio and secretary of Housing and Urban Development under former President Obama.

That kind of public criticism is putting more pressure on consumer-facing businesses to pick a side, experts say.

“Whether they want to or not, I think [companies are] going to increasingly get pulled into policy issues, and sometimes policy issues that are very political. In the old days, maybe it was a little easier to say, ‘We don’t comment on it. We don’t talk about it.’ I think increasingly that’s just not really realistic,” said John Forrer, director of the Institute for Corporate Responsibility at George Washington University.

Voting rights advocates are focusing their attention on Arizona and Florida as well.

In Arizona, a bill that would impose restrictions on early and mail-in voting is likely to land on Gov. Doug Ducey’s (R) desk. The state legislature in Florida, where potential 2024 GOP presidential contender Ron DeSantis is governor, is considering a similar bill targeting absentee ballots.

Both states have major sporting events on the horizon, just like Georgia did. The Super Bowl is slated for Glendale, Ariz., in 2023, and Miami is in the running to host part of the 2026 FIFA World Cup.

The intensifying debate isn’t just ensnaring companies with headquarters in states considering new voting laws.

Brad Smith, president of Redmond, Wash.-based Microsoft, said his company is concerned about Georgia’s election law after deciding “to invest substantially in Atlanta” by purchasing land for new office space.

“Two things are clear to us. First, the right to vote is the most cherished aspect of democracy. And second, this new law has important provisions that unfairly restrict the rights of people to vote legally, securely, and safely,” Smith wrote in a blog post, noting that the company raised concerns with the legislation before it became law.

The national-level corporate criticism comes five years after North Carolina faced significant backlash for enacting its so-called bathroom law that targeted transgender people. The state lost more than $3.76 billion in business, according to an Associated Press analysis from 2017, as major companies refused to build or expand in the state and concerts and major sporting events were canceled.

Few companies have taken similar action in Georgia, though Major League Baseball’s announcement on Friday could prompt others to follow suit.

“The most proactive action as a company … is to come out now and say, ‘Look. We stand against a policy in any state that doesn’t meet these basic criteria, or we expect any voting policy to look like X,'” said Daniella Ballou-Aares, CEO of the Leadership Now Project, a consortium of more than 300 business leaders and academics working to enact democratic reforms.

Ballou-Aares, who worked in the State Department during the Obama administration, said employers face even more pressure to do something when the legislation is in their home state.

“Companies have always been concerned about their employees, and we have seen companies engage for a long time on issues relevant to their local employees,” said Ballou-Aares.

In Georgia, both Coca-Cola CEO James Quincey and Delta CEO Ed Bastian called the voting bill “unacceptable” but only after boycott threats.

Georgia Democrat Stacey Abrams called the responses from corporate America “mealy-mouthed” and said she was “deeply disappointed” that many didn’t speak up until after the bill was signed into law, not while it was making its way through the state legislature.

Forrer said such missteps can be prevented.

“It’s natural for activists to try to target those corporations that are most closely aligned with it to try to turn the heat on. So companies need to start anticipating taking stances on issues because they are increasingly being pressured to,” he said.

Some state leaders seemed to welcome the fight with their corporate critics.

Georgia Republicans this week took a swipe at Delta by passing a bill in the state House to repeal a tax break on jet fuel.

When asked this week about the corporate backlash, Georgia Gov. Brian Kemp (R) told CNBC he’s “glad to deal with it.”