Since HB2 — the new law prohibiting local LGBT anti-discrimination ordinances and banning transgender people from using the bathroom that reflects their gender — went into effect in North Carolina late last month, 29 groups that were considering Charlotte have expressed concern and hesitation about bringing their meetings there, according the Charlotte Regional Visitors Authority (CRVA). Laura White, CRVA’s director of communications, told Convene that those groups include associations, corporations, and sporting events, and represent both hotel and Charlotte Convention Center business.

Four groups that had booked meetings in Charlotte hotels have canceled their contracts, including the Virginia-based Southern Sociological Society, which planned to meet in Charlotte every four years. According to The Charlotte Observer, in a letter to The Westin Charlotte — where the society was booked to hold its annual meeting in 2019 — Southern Sociological President Barbara Risman, wrote: “I represent our entire executive council in expressing our distress that North Carolina has passed a law that discriminates against people based on sexual orientation and gender expression.”

What legal recourse do groups with existing contracts with hotels and venues have if they decide to cancel after a objectionable law is passed in their host destination? Little to none, according to Lisa Sommer Devlin, Devlin Law Firm P.C., who has specialized in hospitality law for 25 years. “Groups always have the option to cancel if they don’t like a law passed,” she told Convene, “but they are not legally excused from their contract due to the law and would have to pay cancellation damages. The only exception would be if they had a term in their contract that expressly allowed them to cancel without payment in the event a law was passed that they found objectionable.”

However, Sommer Devlin added, “most hotels would not agree to such a term since they have no control over what their state may pass and they do not want to bear the financial loss.” Sommer Devlin, who is based in Arizona, said she has represented hotels that collected cancellation damages from groups that elected to cancel events in that state “because they disagreed with what many saw as Arizona’s ‘anti-illegal immigration law.'”

So, short of their breaking their contract, what can groups do? Sommer Devlin said they can use the event as an opportunity to voice their objections to the law. “I saw a suggestion recently that attendees could be given postcards during the meeting pre-addressed to the governor to write out their objections,” she said. (We’ve written before about how meetings can effect social change.)

When it comes to crafting contracts, groups need to keep in mind that “the political pendulum swings back and forth,” Sommer Devlin said, and “things like this may happen. Attendance may be impacted by many different things and that is a risk inherent in all event contracts. That is what the performance/attrition clause is designed to cover.”

Meanwhile, White said the CRVA is in “preserving client relationship mode.” CRVA President Tom Murray said in a statement that the CRVA continues “to hear negative feedback and potential event cancellations from our customers. This issue is in danger of setting us back from the progress we’ve made in positioning Charlotte as an attractive, inclusive destination. Our city has long had a track record of creating an environment that not only values diversity, but strongly embraces it. On behalf of the visitor economy that represents one in nine jobs across the Charlotte region, we strongly urge that state and local leaders find a resolution that represents the best interests of our city and state.”

Read how two other North Carolina DMOs are reacting to the controversial law here.