Feds: North Carolina LGBT Law Violates Civil Rights State is at risk of a lawsuit from the Justice Department By Newser Editors and Wire Services Posted May 4, 2016 5:40 PM CDT 198 comments Comments A North Carolina resident holds a sign showing her support for the Human Rights Campaign last month. (Jason E. Miczek/AP Images for Human Rights Campaign) (Newser) – A North Carolina law limiting protections to LGBT people violates federal civil rights protections and can't be enforced, the US Justice Department said Wednesday, putting the state on notice that it's in danger of being sued and losing hundreds of millions of dollars in federal funding, the AP reports. In a letter to Gov. Pat McCrory, the Justice Department said federal officials view the state law as violating federal Civil Rights Act protections barring workplace discrimination based on sex. Provisions of the state law directed at transgender state employees violate their anti-discrimination protections, the letter said. "The state is engaging in a pattern or practice of discrimination against transgender state employees and both you, in your official capacity, and the state are engaging in a pattern or practice of resistance" of their rights, the letter said. McCrory's office didn't respond to email and text messages Wednesday. In the past, the governor has defended the law and said he didn't think it would have any financial impact, either on the economy in general or on federal school funding in particular. But shortly after it was passed, PayPal reversed plans to open a 400-employee operation center in Charlotte, Deutsche Bank froze expansion plans near Raleigh, and convention officials reported some meetings were avoiding the state. The Justice Department has also notified the University of North Carolina that the state law violates Title IX of the Civil Rights Act, which bars discrimination in education based on sex. That could lead to North Carolina losing hundreds of millions of dollars in federal school funding. The letter effectively serves as a warning to the state to proceed at its own peril or risk being sued.