A closed shop agreement is a contract between an employer and a labor union that stipulates that the employer will only hire workers from a specific union and those workers can only remain with that employer while they are a part of the union that the agreement covers.

What Is a Closed Shop Agreement?

Also known as pre-closed shop agreements, closed shop agreements are set in place to help protect union workers. Under this type of agreement, a certain company may require all of their employees to become a part of a specific labor or trade union.

A closed-shop agreement is found among the terms and conditions of a labor contract. Here, you'll find that, in order to remain employed by the company that is contracted, you need to be a good-standing member of the specific union that is contracted. This means that the company is required to fire any employee that chooses to leave the union or loses their status of good standing.

There are a few methods used throughout the general workforce to protect different labor organizations and industries. During the first half of the 1900s, the United States government passed and updated labor laws to protect American workers and tradesmen.

In some cases, trade unions have ended up with a monopoly over a certain industry and the companies within that industry. When this happens, all of the companies in an industry have to hire union workers, and they call this "closed shop."

Some variations to union arrangements include:

Union Membership Enforcement

If a company tries to force a worker to join a union in order to keep their job, that employee has the option to take their case to a tribunal, which is set up to handle issues of employment. They will hear the case and could require the employer to provide compensation to the worker.

When a company decides to check on the union memberships of their employees, they can give a specific date for "escape." This means that any employees who do not want to be a part of the required union may leave the company, otherwise, they will have to remain a part of the union for as long as the contract is in place or they could be fired.

Because there are many protections in place for both employers and employees, closed shop agreements are very difficult to enforce on either side of the agreement.

Pre-Entry and Post-Entry Agreements

Pre-entry agreements prevent companies from hiring employees who are not members of the particular union covered in the agreement. Post-entry agreements require any employees hired by the company in question to join a specific union within a set time period once they've been hired.

Union Shop Agreement

Union shop agreements are less intense than closed shop agreements because they allow companies to hire individuals who are not members of a specified union. They do, however, require the company to make anyone they hire join a specified union before a set amount of time has elapsed since the time of employment. These time periods are usually set 30 days after the hiring date.

If the employee pays their union fees and dues but does not want to join the union, the employer cannot legally fire them on those grounds alone.

Agency Shop Agreement

Of these three types of union agreements, the agency shop agreement allows for the most flexibility. Employees can choose to remain non-members of the specified union as long as they pay the necessary dues to the union.

In states where "right to work" laws are in place, such union agreements are not enforceable.

What Is a Trade Union?

Employees who come together and form an organization around their particular trade or industry call themselves a trade union or a labor union. As long as this group of workers abides by the Rules of Association, they can be considered unionized.

Members of trade unions have contractual rights and obligations to the union. They will be afforded the protection of the union, but they will likely be required to pay dues and fees on a semi-regular basis. If the member commits a breach of contract, the union has the right to terminate their membership.

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