Tennessee Governor Bill Haslam has defended signing a bill into law that bars cities and municipalities from enacting gay protection laws even as activists vow to challenge the law in court.

The measure, signed Monday, forbids local governments from enacting anti-discrimination ordinances that go beyond state laws, which do not include gay protections.

Haslam said the law would make Tennessee an easier place to conduct business.

“We just don't think local governments should set HR [human resources] policies for business,” he said.

The law overturns Nashville's 2009 ordinance which bans employment discrimination based on sexual orientation and gender identity (transgender protections).

State lawmakers acted after the city approved a plan to require contractors doing business with the city to abide by the ordinance.

“The one thing that business must have is consistency to survive and thrive,” Republican Representative Glen Casada, who sponsored the House version of the bill, told The Wall Street Journal.

“The law must be challenged in court,” said Kate Kendell, executive director of the San Francisco-based National Center for Lesbian Rights.

Joe Solmonese, president of the Human Rights Campaign, the nation's largest gay rights group, called Haslam's approval “an apparent attempt to score cheap political points.”

“Since there are no state protections for sexual orientation or gender identity, the Governor’s signature of this bill becomes a green light for anti-LGBT discrimination across the state,” Solmonese said in a statement.