Despite the calling of a special legislative session for the purpose of repealing North Carolina’s HB2 legislations, the General Assembly recently rejected attempts to remove the 2016 law. The initial agreement among legislators fell apart based on concerns that North Carolina municipalities would react to the repeal by adopting new ordinances extending legal protections to LGBT individuals.

Where does this rejection leave North Carolina employers? While some of the employment portions of HB2 were rescinded by the General Assembly earlier this year, the remaining provisions ban municipal governments from prohibiting employers from discriminating against LGBT persons. Another portion of the law stops municipal governments from adopting minimum wage requirements higher than the state’s $7.25 level.

Pending cases at the federal level may moot the employment discrimination provisions of HB2. The Seventh Circuit Court of Appeals is considering appeal of a decision that extended Title VII’s sex discrimination prohibitions to include discrimination on the basis of sexual orientation. Other federal court decisions in the Fourth Circuit and beyond have recognized employment discrimination on the basis of gender identity as a form of prohibited sexual stereotyping under Title VII. These decisions may extend federal LGBT employment discrimination bans to North Carolina employers regardless of contradictory state law.