Just before the start of a special legislative session in Texas last week, International Business Machines Corp. dispatched two top executives to Austin, hoping to convince lawmakers to oppose a bill that would restrict bathroom use for transgender people.
The move by IBM, which recently ran full-page local newspaper ads against the measure, exemplifies the intensifying battle in Texas over the issue, which legislators have begun debating for the second time this year.
It also signals the widening dispute over the direction of the Lone Star State and the Texas GOP: Socially conservative Republicans led by Gov. Greg Abbott and Lt. Gov. Dan Patrick have sought to push Texas rightward. Moderate Republicans aligned with big businesses are pushing back, worried that such an approach will slow Texas's humming economy.
"We would have preferred if we didn't have to get involved in this case, " said Diane Gherson, IBM's chief of human resources, who traveled from the company's Armonk, N.Y. headquarters to Austin last week. "We realized it was important to have face to face dialogue with legislators to make sure they understood where we are on the issue," she added, saying the legislation was against the company's policy of diversity and inclusion.
This year in particular, an array of social issues like gender identity, immigration and abortion have become flashpoints here, both at the statehouse and in legal battles, as the state's top GOP leaders have sought to burnish Texas's conservative identity. As the special session continues this week, the bathroom bill is taking center stage, putting on full display the chasm between the moderate and conservative factions of the GOP.
"Texas is trying to balance a role in the global community and economy equivalent to that of California and New York, with a Republican Party whose social conservative wing has values that are more in line with isolated rural states like Idaho and Wyoming," said Mark Jones, political-science fellow at Rice University's Baker Institute for Public Policy.
Earlier this year, Texas passed one of the nations' toughest immigration laws, which bans sanctuary policies and threatens law-enforcement officials with jail time if they don't comply. Major Texas cities, including Dallas, Houston and Austin, are challenging the state in federal court to block the law from taking effect in September.
But the bathroom bill, which seeks to regulate public restroom use based on a person's biological sex at birth, has generated the most controversy. The measure failed to pass during the recent legislative session. But it was added to the special session agenda by Gov. Abbott, who supports the proposal and like Mr. Patrick calls it a safety issue.
Texas Republicans control both chambers of the legislature. A new version of the legislation, which requires people in public schools and government buildings to use the bathroom of the sex listed on their birth certificate or other types of state identification, cleared the state Senate on Tuesday. But its fate in the more moderate House is unclear.
"This is has nothing to do with transgender people," said Lt. Gov. Patrick, adding that the bill was designed to protect women from sexual predators and that many businesses he had spoken with understood its intent.
In recent weeks, Mr. Patrick has traded increasingly heated barbs with House Speaker Joe Straus, a moderate Republican, over the issue, accusing him of blocking an issue supported by most Texas GOP lawmakers.
Mr. Straus, who has said the bathroom bill is unnecessary, has urged businesses to be more outspoken in their opposition this time around.
"I hope this is a wake-up call to the business community not to take for granted that things won't get out of hand here," he said, noting that the political atmosphere in Texas had become too focused on "divisive social issues."
Some Texas businesspeople said they weren't bothered by the legislation and welcomed the state's turn to the right.
Joseph Slovacek, a senior partner at a Houston civil-litigation law firm, supports both the bathroom bill and the sanctuary policy ban, and praised both Mr. Patrick and Mr. Abbott for staying true to what he says are Texas' core values.
"This is common sense. I don't think city ordinances or school district should try to tell the state of Texas who is a man, who is a woman and who can go into which restrooms," said Mr. Slovacek, a Republican who raised money for President Donald Trump's campaign.
On Tuesday, Mr. Abbott touted several groups, including the Southern Baptists of Texas Convention and the Texas Home School Coalition that support the issue.
Meanwhile, opponents of the measure in the business community are ramping up pressure on lawmakers to reject the bill.
IBM chief executive Ginni Rometty called Gov. Abbott last week to voice her disagreement with the measure, the first time they have spoken about the matter, the company said. IBM employs 10,000 people in Texas, and says, the legislation will affect its ability to recruit top talent to Texas. The company said it will consider investing elsewhere if the measure is approved.
The Texas Association of Business, an opponent of the bathroom bill, recently announced an ad campaign against the measure. The first ads, which began running this week on radio, feature a former Republican state legislator and a Republican county judge.
"But bathroom bills are completely unnecessary and go against my Christian values and conservative principles," said Denton County Judge Mary Horn in one of the ads.
Earlier in May, top tech leaders including Ms. Rometty, Mark Zuckerberg, CEO of Facebook Inc., Tim Cook, CEO of Apple Inc., and Meg Whitman, CEO Hewlett Packard Enterprise wrote to Mr. Abbott expressing their opposition to "discriminatory legislation."
"The kinds of people that are the best in the world at creating technology, at creating entertainment...these are people that do not want to live in places that are seen as discriminatory," said Randy Pitchford, the CEO of Gearbox Software, a popular videogame company based in North Texas, who signed the letter.
The governor's office says fears about Texas' growth are unfounded, noting that at least nine major corporations have announced relocations to Texas over roughly the past year, including Jamba Juice, Mitsubishi Heavy Industries and Hulu, drawn by low taxes and fewer regulations.
Earlier this month, Mr. Abbott formally welcomed Toyota Motor Corp.'s North American Headquarters to Plano, north of Dallas, from its previous home in Southern California.
According to the Federal Reserve Bank of Dallas, Texas has seen a 2.7 percent job growth this year, more than double the employment growth from 2016.
Write to Dan Frosch at email@example.com
(END) Dow Jones Newswires
July 27, 2017 09:14 ET (13:14 GMT)