Closed shops

A pre-entry closed shop (or simply closed shop) is a form of union security agreement under which the employer agrees to hire union members only, and employees must remain members of the union at all times in order to remain employed. This is different from a post-entry closed shop (US: union shop), which is an agreement requiring all employees to join the union if they are not already members. In a union shop, the union must accept as a member any person hired by the employer.

International Labour Organization covenants do not address the legality of closed shop provisions, leaving the question up to each individual nation. The legal status of closed shop agreements varies widely from country to country, ranging from bans on the agreement, to extensive regulation of the agreement to not mentioning it at all.

The Taft–Hartley Act outlawed the closed shop in the United States in 1947. The union shop was ruled illegal by the Supreme Court. States that have passed right-to-work laws go further by not allowing employers to require employees to pay a form of union dues called an agency fee. An employer may not lawfully agree with a union to hire only union members, but it may agree to require employees to join the union or pay the equivalent of union dues to it, within a set period after starting employment. 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.

The United States Government does not permit the union shop in any federal agency regardless of state law allowing for such.

Construction unions and unions in other industries with similar employment patterns have coped with the prohibition of closed shops 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. 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.

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