CLOSED SHOP refers to a union security clause in labor-management contracts that stipulates that all persons who are to be employed must be members of a specified union as a precondition for such employment.
The closed shop was a dominant feature of early unionism in the United States, a natural outgrowth of the guild features of craft organization of work. The focus of the guild was on the maintenance of the quality of output through strict enforcement of apprenticeship standards. Many early unions stipulated that employers could hire only fully certified journeymen and would be subject to penalty if they failed to do so. Craft members, moreover, were subject to fines if caught working with persons not members of the union. The strong fraternal character of early unions helped buttress such arrangements, which seemed justified (at least to members) by the attention they gave to sustaining the quality of work by preserving the integrity of craft skills. Such arrangements also boosted wages by restricting the size of the pool of available workers. Although seldom made contractually explicit, closed shop arrangements were pervasive throughout the early twentieth century and were a source of considerable controversy and conflict.
In 1935, the National Labor Relations Act legislated a major intrusion of public policy into collective bargaining in an effort to reduce the widespread industrial conflict. Major provisions, which the newly created National Labor Relations Board (NLRB) was to implement, were aimed at reducing strikes over union recognition. Appropriate bargaining units were to be defined by the board; a secret-ballot vote was then to be taken under board supervision in the matter of union representation. A union gaining more than half of that vote was to be certified by the board as the exclusive bargaining agent for that unit. The employer was then obligated to bargain in good faith with that union, and the union was obligated to equally represent all persons in the bargaining unit, whether members or not.
There were obvious advantages to the union movement in shifting the locus of decision making about union recognition from the economic to the political arena. In securing the right to exclusive representation for at least a year following certification, the union had the opportunity to extend its influence over the bargaining unit. One logical extension of such recognition was to strengthen the union's membership base and its revenue flow. Rather than overtly pursuing an exclusionary policy involving a closed shop with a union that limited membership, most unions preferred to adopt an inclusionary posture. They negotiated union security clauses to expand rather than to restrict membership. The ultimate result was a growth in closed shop arrangements.
However, the closed shop arrangement could be used against the worker as well as against the employer. Expulsion from the union meant loss of job rights, and there were several reasons why a union might expel a member. A worker might be expelled for refusing to adhere to the production ceilings established for piece-rate operations. The union might undertake selective retaliation against dissidents within the union political structure. Or, retaliation might follow a member's support of another union vying for representation rights in the shop. In brief, with a closed shop, the union was no longer a private fraternal organization. It controlled the job. It was a dispenser of bread.
Initial assaults against union exclusionary policies took the form of conspiracy charges—that the monopolistic privileges accruing to union members increased product prices, reduced production, curtailed employment, and diminished wages in nonunion industries because of the additional flow of labor squeezed out of "protected" sectors. The 1947 Taft-Hartley Act amendments to the National Labor Relations Act were designed to remedy these ills by banning the closed shop. The public policy behind Taft-Hartley, as well as the 1959 Landrum-Griffin amendments to the National Labor Relations Act, was to restrict traditional union control over the point of ingress into the labor market. Obeisance to the union movement was not to be a requisite for favored treatment in pay or promotions within the plant. The economic status of the worker was to reflect the bilateral influences of both employer and union, not the unilateral discretion of the union. Nonmembers and members were to be treated as persons with undifferentiated status in the distribution of collective-bargaining gains. Controversy diminished during the late twentieth century as unions adhered to a new doctrine: employers have the "freedom" to hire nonunion employees, just as workers have the freedom to refuse to work with nonunion employees.
Also affected by public policy and union stance were alternative forms of union security, to be sharply distinguished from the closed shop. A favored union clause, now illegal, is one in which the employer openly identifies his partiality to a union and encourages membership in that organization. An agency shop allows the union to collect agency fees or service fees from workers, while not requiring the formality of membership. These fees cover union expenses associated with collective bargaining, and are justified by the union's obligation to bargain for all employees in the bargaining unit regardless of union affiliation. A 1980 amendment to the National Labor Relations Act provides that workers with religious objections cannot be fired for failing to pay service fees to a union.
Another form of union security is the union-shop agreement. Union-shop agreements formerly specified that workers in a union were to maintain membership affiliation as a condition of employment, with escape periods typically provided during the term of the contract. The National Labor Relations Act still permits contract provisions that require employees to join the union within thirty days of hire. However, in 1985 the Supreme Court held that contracts may not limit a worker's ability to resign from the union. Union-shop agreements can no longer require maintenance of union membership. In addition, several states have also enacted right-to-work laws that prohibit union-shop agreements altogether.
In short, changes in labor law and its judicial interpretation over the course of the twentieth century have undermined the ability of unions to bargain for contract provisions that enhance their security and their ability to discipline members.
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A shop in which persons are required to join a particular union as a precondition to employment and to remain union members for the duration of their employment.
The federal National Labor Relations Act (NLRA) (29 U.S.C.A. §§ 151 et seq.) protects the rights of workers to organize and bargain collectively and prohibits management from engaging in unfair labor practices that would interfere with these rights. Popularly known as the wagner act, the NLRA was signed into law by President franklin d. roosevelt on July 5, 1935.
Among the workers' rights legalized by the NLRA was the right to enter into a "closed shop" agreement. It differs from a union shop, in which all workers, once employed, must become union members within a specified period of time as a condition of their continued employment. Closed shop agreements ensured that only union members who were bound by internal union rules, including those enforcing worker solidarity during strikes, were hired.
As world war ii ended a decade after the NLRA was enacted, unions sought to make up the pay cuts caused by wage freezes during the war, resulting in a rash of strikes. Many people viewed these strikes as economically destructive, and union practices, such as closed shop agreements, became increasingly unpopular. Critics of the closed shop contended that it allowed unions to monopolize employment by limiting membership or closing it altogether. They also argued that the closed shop allowed unions to force unwilling individuals to give them financial support.
In response to these criticisms, Congress amended the NLRA in 1947, with the adoption of the labor-management-relations act (29 U.S.C.A. §§ 151 et seq.). Known as the taft-hartley act, this law placed many restrictions on union activities. It limited picketing rights, banned supervisory employees from participating in unions, and restricted the right to strike in situations where the president of the United States and Congress determined that a strike would endanger national health and safety. The Taft-Hartley Act prohibited secondary boycotts, wherein a union incites a strike by employees of a neutral or "secondary" party, such as a retailer, in order to force the secondary party to cease doing business with the party with whom the union has its primary dispute, such as a manufacturer. The Taft-Hartley Act also allowed individual states to ban the union shop by passing right-to-work laws that prohibited employees from being required to join a union as a condition of receiving or retaining a job.
Section 8(a)(3) of the Taft-Hartley Act specifically outlawed the closed shop but did allow a collectively bargained agreement for a union shop, provided certain safeguards were met. Under the union shop proviso, a union and an employer could agree that employees must join the union within thirty days of employment in order to retain their jobs. Section 8(a)(3) stated, in relevant part,
It shall be an unfair labor practice for an employer—… (3) by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization: Provided, that nothing in this subchapter, or in any other statute of the United States, shall preclude an employer from making an agreement with a labor organization …to require as a condition of employment membership therein on or after the thirtieth day following the beginning of such employment or the effective date of such agreement … if such labor organization is the representative of the employees…. Provided further, that no employer shall justify any discrimination against an employee for nonmembership in a labor organization (A) if he has reasonable grounds for believing that such membership was not available to the employee on the same terms and conditions generally applicable to other members, or (B) if he has reasonable grounds for believing that membership was denied or terminated for reasons other than the failure of the employee to tender the periodic dues and the initiation fees uniformly required as a condition of acquiring or retaining membership.
Some observers believe that the abolition of the closed shop helped to minimize racial discrimination by unions. The Wagner Act allowed unions to effectively shut out black employees from employment opportunities and benefits by simply refusing them membership. The Taft-Hartley Act curtailed this practice by prohibiting the negotiation of security agreements that limited employment opportunities to union members.
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A closed shop was a workplace in which anyone who hoped to gain employment had to first join a labor union. Closed shop requirements remained one of the most aggressive methods a labor union could use to maintain its power among a company's workforce. A less radical form was a "union shop," in which nonunion workers could join the workforce provided they joined the union within a certain period of time. Conversely, a workplace where workers freely belonged to a union or remained nonunionized was called an "open shop."
Labor unions first became powerful during the Industrial Revolution of the nineteenth century when workers banded together for improved pay and working conditions. During the Great Depression of the 1930s, economic conditions became so difficult that the federal government passed laws such as the National Industrial Recovery Act of 1933 and the National Labor Relations Act of 1935. These acts gave workers the right to bargain collectively (as a single group) with management and required management to negotiate with duly elected union officials. However, during the remainder of the 1930s and in the 1940s some unions in the Northeast and Midwest, the regions with the most heavy industries and the most unions, began requiring that prospective employees be union members before a company could hire them.
After World War II (1939–45) and the damaging labor strikes of 1946, attempts were made to rein in the growing power of the U.S. labor union, culminating in the Taft-Hartley Act of 1947. The act sharply limited the circumstances in which closed shops were legal and enabled state governments to outlaw union shops if they chose. However, even after the Taft-Hartley Act became law many workplaces continued to be informal closed shops. In such workplaces there was no "union only" requirement written anywhere in the labor agreement, but only workers who were already members of the union were ever hired. In some workplaces union workers would simply refuse to work with anyone who was not already a member of the union—this practice is a "de facto" closed shop. Closed shops are most common in industries where the company allowed the union to hire workers and where workers were employed by a specific company for a short time, as in the construction industry or among longshoremen.
A workplace is a closed shop if, by virtue of a labor contract, only the members of a particular union may be hired. After passage of the tafthartley act (1947), the closed shop was replaced by the "union shop" wherein one must join the union after being hired.
Dennis J. Mahoney