An open shop is a place of employment at which one is not required to join or financially support a union (closed shop) as a condition of hiring or continued employment. Open shop is also known as a merit shop.
The major difference between an open and closed shop is the requirement for union membership. There are a variety of opinions regarding the benefits and negatives of open shops.
In the United States, the introduction of 'right to work' laws has been linked with lower overall benefits but higher economic growth by some proponents. Such conclusions are debatable, however, as employment, investment, and income in traditionally unionized sectors of the economy cannot be correlated to passage of such laws
Open shops is where a factory, office, or other business establishment in which a union, chosen by a majority of the employees, acts as representative of all the employees in making agreements with the employer, but in which union membership is not a condition of employment.
Unions have argued against the open shop adopted by United States employers in the first decade of the twentieth century, seeing it as an attempt to drive unions out of industries. For example, construction craft unions have always relied on controlling the supply of labour in particular trades and geographical areas as a means of maintaining union standards and establishing collective bargaining relations with the employers in that field.
In order to do that, unions argued, construction unions—and to a lesser extent unions representing musicians, longshore workers, restaurant employees and others who work on a transitory and relatively brief basis—must require that employers hire only their members.
The open shop was also a key component of the American Plan introduced in the 1920s. In that era the open shop was directed not only at construction unions but also unions in mass production industries. Unions again felt that these proposed policies would give employers the opportunity to discriminate against union members in employment and would also lead to a steadfast opposition to collective bargaining of any sort.
The term open shop is also used similarly in Canada, mostly in reference to construction contractors that have at least a partially non-union workforce. Canadians enjoy the freedom to associate, guaranteed by the Charter of Rights and Freedoms, inherently including the right not to associate.