Union Shops, Closed Shops, and the Law

The interplay between federal law, state law, and labor unions is complex. Over the years, as the nature of industry has changed, the implementation of federal and state laws has also changed the way that businesses interact with unions. Read on to learn about union shops, closed shops, and the law.

Defining the Types of Shops

Businesses can be categorized based on their position regarding union membership. How the law treats different types of "shops" has changed throughout history with the passing of several sweeping federal laws impacting unions. When understanding how businesses and unions interact, it's helpful to first become familiar with some common terminology as applied to different types of businesses:

  • "Closed" Shops: Ones in which the employer and the union agree that the employer will only hire union members
  • "Union" Shops: Businesses in which employers are free to hire non-union members, but union membership is required within a specified period of type (often 30 days) as a condition of continued employment
  • "Agency" Shops: Employers can choose to hire either union or non-union members, and the labor union serves as a bargaining agent for all employees. While non-unionized workers don't have to join the union as a condition of continued employment, all employees must pay union dues, regardless of union membership.

State and Federal Law Restricting Unions

The history of labor law and unions reflects a progression from fewer restrictions to more limitations on union power. During the Great Depression, Congress enacted a variety of laws to help the unemployed and struggling, including a variety of New Deal legislation. Congress also passed the National Labor Relations Act of 1935 (commonly known as the Wagner Act), which gave workers the right to organize, join unions, strike, and collectively bargain.

However, following World War II, a newly Republican-led Congress took steps to limit the powers of unions by enacting the Labor Management Relations Act of 1947, otherwise known as the Taft-Hartley Act. This Act significantly changed the Wagner Act by making closed shops illegal. The Taft-Hartley Act allowed union shops, but also specifically allowed individual states to pass state laws prohibiting union shops. While the Wagner Act allowed businesses to contract with unions and form "agency" shops, the Taft-Hartley Act left the door open for states to pass laws outlawing agency shops.

As a result of the Taft-Hartley Act, many states have enacted laws that place limitations on unions. These are known as "right to work" laws, which are somewhat of a misnomer, given that the laws don’t give employees a general right to be employed. Instead, right to work laws decree that no person can be compelled to join a union or pay union dues as a condition of employment. More than half of U.S. states have enacted right to work laws. Many states also include limitations on "union" shops and "agency" shops as provisions of right to work legislation.

Get Legal Guidance with Labor and Union Issues

How labor and employment laws impact you will vary considerably depending on the laws of your state. If you need help related to union membership or other employment issues, consider speaking with an experienced labor lawyer.

Next Steps

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