Among other things, the law directs public schools, public universities and government agencies to designate bathrooms and locker rooms for use only by people based on their biological sex, and says transgender people can only use bathrooms matching their gender identity if they've had their birth certificates changed, which in North Carolina usually requires sexual reassignment surgery.
Businesses and politicians have announced boycotts of North Carolina, and legal challenges ensure that the wedge issue will dominate the Republican governor's re-election campaign against his Democratic challenger.
The North Carolina suit raises similar claims, alleging that transgender people who haven't received a sex-change operation and changed their birth certificate can't access their preferred restrooms, and are therefore treated unequally from non-transgender people.
Since Grimm's trial judge has yet to decide constitutional issues, the appellate ruling will focus on the Title IX question and "won't provide guidance about the constitutionality of the North Carolina law," said Kevin Walsh, a University of Richmond expert in constitutional law.
North Carolina's law also bars local governments from making their own restroom ordinances, providing other protections from discrimination based on sexual orientation and gender identity, or requiring businesses to pay higher wages or paid sick leave, raising authority questions that aren't at issue in the Virginia case.
The use of public facilities by transgender people has emerged as the next most important legal issue for LBGT advocates, and North Carolina is the first state to require public school and university students to use only bathrooms that match their birth certificates, according to the National Conference of State Legislatures.
