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In North America a closed shop is a business or industrial factory in which union membership (often of a specific union and no other) is a precondition to employment. It is opposed to the open shop, which does not consider union membership in hiring decisions and does not give union members preference in hiring. It is different from the union shop, which does not require employees to be union members as a condition of employment, but does require that they join the union or pay the equivalent of union dues within a set period of time following their hire.
In the United Kingdom a closed shop has a similar common meaning to the "union shop".
Origins of the closed shop
In the United States and Canada, construction craft unions and other unions representing employees, such as musicians, longshore workers, and restaurant employees, who work on a transitory and relatively brief basis, relied on the closed shop as a way of maintaining union standards and establishing collective bargaining relations with the employers in that field. Because such employers often had very high employee turnover, union gains could be lost if an employer replaced its unionized workforce with non-union employees willing to work longer hours or at lower rates of pay. Unions therefore insisted on the closed shop to give them control over the labor market, to reserve job opportunities for their members and to protect union standards.
Construction unions also used the closed shop as a means of defending their jurisdictional claims over certain types of work and work processes, by insisting that only members of their unions could perform certain functions, e.g., the work of erecting electrical signals on a worksite, which the International Brotherhood of Electrical Workers might claim as its members' work, as opposed to the lower-paid Laborers to whom the employer may have assigned the work. By dividing work functions among groups of workers dispatched from separate unions, the closed shop cemented the craft distinctions that unions fought to maintain.
Industrial unions also tried to obtain the closed shop as a means of cementing the gains that they had won. In the era before the acceptance of grievance arbitration as a means of enforcing collective bargaining agreements, in which a union's only effective means of preventing an employer from violating the contract it had agreed to was to strike in protest, the closed shop was a necessary means of maintaining the solidarity necessary to preserve those contract terms. Similarly, in the later nineteenth century and the early part of the twentieth century, when workers had few, if any, protections against being discharged for their union membership, the closed shop was the most effective means of preventing employers from discriminating against union members. Finally, the closed shop gave union leaders a powerful lever in any battles with their political opponents within the union since they might be able to drive their opponents from the industry by expelling them from the union.
The legal status of the closed shop
The Taft-Hartley Act outlawed the closed shop in the United States in 1947, but permits the union shop, except in those states that have passed "right-to-work laws", in which case even the union shop is illegal. An employer may not lawfully agree with a union to hire only union members; it may, on the other hand, agree to require employees to join the union or pay the equivalent of union dues to it after a set period of time. Similarly, while a union could require an employer that had agreed to a closed shop contract prior to 1947 to fire an employee who had been expelled from the union for any reason, it cannot demand that an employer fire an employee under a union shop contract for any reason other than failure to pay those dues that are uniformly required of all employees.
Construction unions and unions in other industries with similar employment patterns have coped with that prohibition by using exclusive hiring halls as a means of controlling the supply of labor. While such exclusive hiring halls do not, in a strictly formal sense, require union membership as a condition of employment, they do so in practical terms, in that an employee seeking to be dispatched to work through the union's hiring hall must either pay union dues or pay a roughly equivalent hiring hall fee. So long as the hiring hall is run on a non-discriminatory basis and adheres to clearly stated eligibility and dispatch standards it is lawful. The Taft-Hartley Act also bars unions from requiring unreasonably high initiation fees as a condition of membership in order to prevent unions from using initiation fees as a device to keep non-union employees out of a particular industry.
For the entertainment industry, unions representing performers have as their first rule one banning any represented performer from working on any non-union production. Penalties are imposed on the union member, not on the employer, and can lead to loss of union membership. Most major productions are union productions, and non-members join the Screen Actors Guild through performing as extras and earning three union vouchers, or by being given a speaking line and entering that way. The other performance unions do not have minimum membership standards, but joining the union bars one from working on non-union productions.
Also, the National Labor Relations Act permits construction employers to enter into pre-hire agreements, in which they agree to draw their workforces from a pool of employees dispatched by the union. The NLRA prohibits pre-hire agreements outside the construction industry.
The status of closed shops varies from province to province within Canada. The 1946 Supreme Court ruling Rand formula determined largely that, while Section Two of the Charter of Rights and Freedoms guaranteed both the freedom to associate and the freedom not to associate, employees in a work-environment largely dominated by a union were beneficiaries of union policies, and, as such, should pay union fees, regardless of membership status (see dues shop). However, religious and consciencious objectors were allowed the option of paying the amount to a registered charity instead.
All forms of closed shops in the UK are strictly illegal under the Employment Act 1990.
- Johnsen, J. E. The Closed Shop. 1942.
- ^ 29 USCA 158