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NC Gov McCrory to govt: Stay out of private-sector bathroom policies

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North Carolina Gov. Pat McCrory stood his ground on Wednesday and told CNBC's "Closing Bell" that the private sector should be able to set its own bathroom policies.

McCrory referred to a bill that requires transgender individuals to use the public restroom corresponding to the gender on their birth certificate. The Justice Department says the measure violates civil rights laws and is seeking a court order to block it.

McCrory made his comments after Brian Cornell, chairman and CEO of Target, highlighted his company's inclusive bathroom policy on "Squawk Box." The retailer previously said that customers and employees may use the restroom that "corresponds to their gender identity," winning applause from those fighting for transgender rights. Cornell added that family bathrooms already exist in many Target stores.

"Government ought to stay out of the bathroom policies of the private sector, but the Justice Department, right now, based upon the ruling on Wednesday would rule that what Target is doing is discriminatory because they — a gender expression person should be able to choose whichever group restaurant or dressing room they want. Offering an alternative to that is now deemed to be discriminatory by the U.S. Justice Department of the Obama administration," McCrory said.

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The governor added that his state would be willing to cooperate with the outcome of the legal process.

"What we need is clarification from the federal courts because the lawsuit from the Justice Department is about bathroom policies in our universities, our restaurants, our government buildings and all employers, not just in North Carolina, but throughout the United States of America and all universities," he said.

"The Justice Department and the Obama administration is interpreting this U.S. Civil Rights Act to include a definition of gender identity. Congress would probably disagree with that and we just need clarification and whatever the courts say, we'll follow those rules," McCrory said.

"But the government now is stepping in on this extremely emotional issues on all sides, and we're just asking for clarification. We just happened to be the target of the federal government at this time," he concluded.

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The Justice Department last week gave McCrory until Monday to say he would refuse to enforce the law. Instead, he doubled down by suing the federal government for a "baseless and blatant overreach."

Entertainers and corporations have taken steps to protest the law by cancelling events and expansion plans in the state. North Carolina Attorney General Loretta Lynch said that the law is part of the continued battle over what constitutes civil rights in the state.

"Instead of turning away from our neighbors, friends and colleagues, let us instead learn from our history and avoid repeating the mistakes of our past," Lynch said at a news conference Monday announcing the lawsuit, directly addressing North Carolina residents. "Let us reflect on the obvious but neglected lesson that state-sanctioned discrimination never looks good and never works in hindsight."