Closed shop, in union-management relations, an arrangement whereby an employer agrees to hire—and retain in employment—only persons who are members in good standing of the trade union. Such an agreement is arranged according to the terms of a labour contract.
By the 1930s the closed shop had become a commonly negotiated agreement meant to protect labour organizations. This and other methods became known as “union security.” Less extreme than the closed shop is the union shop, in which the employer may hire a worker who is not a union member if the new employee joins the union within a specified time. Agreements for the maintenance of membership provide that all employees of a company on a specified date who are then members of a union and who do not resign their membership within an “escape period” must remain members of the union for the duration of the agreement; otherwise, they will be dismissed from their jobs. Even more open than the union shop is an agency shop: although employees are required to pay funds equal to union dues, they are not required to join the union. There are many detailed variations of these union arrangements in the United States.
In the United Kingdom and, to a lesser extent, in all other industrial nations, a closed-shop provision is seldom found in a written contract, but it is understood in some industries that union members will walk off the job before they will work alongside nonunionists. This is so commonly assumed among printers, dockworkers, and miners in Britain that employers rarely attempt to employ nonunion workers. Throughout the nations of northern Europe, labour-management agreements are usually made between large industrial segments and a number of unions. In Britain, where union membership is taken for granted, the closed shop has not been as controversial as in the United States. Indeed, British government boards and commissions traditionally expect unions to represent all employees in an industry.
Although closed shops were declared illegal in the United States under the Taft-Hartley Act of 1947, they continue to exist in practice; however, they are not written into contracts. They are used by employers who depend on unions for hiring or by industries that employ workers for only a short period of time (e.g., dockworkers and construction workers). In such cases employers might seek job applicants by contacting union hiring halls, but they remain free to recruit elsewhere.