Closed vs. Open Shops in Labor Relations & Impacts on Human Resource Management

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  • 0:03 Unions & Hiring
  • 0:32 Closed Shops
  • 1:21 Open Shops
  • 1:53 Union Shops
  • 2:29 Collective Bargaining…
  • 2:59 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
Union membership is sometimes required for employment at a company, but it may also not be required. In this lesson, you'll learn about open shops, union shops and closed shops, including what they mean to a company's HR department.

Unions and Hiring

Tom is a freshly minted human resource specialist at a large sports equipment manufacturing company located in the Pacific Northwest. He's a bit concerned because he is in charge of hiring new employees, and his work is going to get a bit more complicated. The employees at the plant voted to form a union a while back. The company and the new union just inked their first collective bargaining agreement. Now he's got to figure out how the union will affect how he hires people, if it does at all.

Closed Shops - Illegal

Tom remembers that his friend Dave is an attorney that works with unions. He decides to invite Dave to lunch in hopes of picking his brain. Never one to turn down a free lunch, Dave gladly accepts Tom's offer. After ordering, Tom asks Dave if he can just hire employees who are already members of the union to make his life easier.

Dave tells Tom that hiring only job applicants who are already union members is illegal as a closed shop. Dave explains that a closed shop exists where an employer agrees to hire only union workers. Closed shops were outlawed in the United States with the enactment of the Taft-Hartley Act. Dave explains that Tom can think of a closed shop as being closed to non-union employees.

Open Shops - Membership Not Required

After hearing about a closed shop from Dave, Tom tells Dave that he'll just hire people regardless of their union membership. If new hires don't want to join the union, that will be the union's problem. A company that doesn't require employees to join a union are called open shops, Dave explains. He tells Tom that he can think of an open shop as being open to both union and non-union workers. However, while open shops are perfectly legal, it's also legal for employers and unions to agree that new hires must join the union.

Union Shops

Tom is now utterly confused because he thought it was illegal for an employer to hire only union members. Dave explains that while it's illegal to not hire someone because they are not a member of a union, an employer can agree in a collective bargaining agreement to require any newly hired employee to become a member of the union as a condition of employment. Such arrangements are called union shops. He told Tom that he can think of a union shop as a company that requires employees to join the union if they want the job.

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