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Overview and Types of Union Agreement Formations

Nathan Mahr, Shawn Grimsley
  • Author
    Nathan Mahr

    Nathan has taught English literature, business, social sciences, history, and writing for over five years. He has a B.A. in Comparative History of Ideas from the University of Washington.

  • Instructor
    Shawn Grimsley

    Shawn has a masters of public administration, JD, and a BA in political science.

Learn about unions. Understand what unions are, learn what a collective bargaining agreement is, and identify the types of union arrangements and how they work. Updated: 08/05/2022

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What are Unions?

A union is an organization of workers that collectively bargain with employers over wages, hours, and other working conditions. The main purpose of unions is to protect the rights of workers and help them get better working conditions. Unions also help workers get higher wages and better benefits. Due to the fact that the union works as a unifying force among employees, employers are forced to deal with the collective opinions, demands, and actions of the employees.

Unions work by negotiating with employers on behalf of their members. These negotiations are called collective bargaining. Collective bargaining is the process by which unions and employers negotiate a contract that governs the terms and conditions of employment. This contract is called a collective bargaining agreement. The collective bargaining agreement sets forth the rights and duties of both the union and the employer. It also sets forth the wages, hours, and working conditions of employees. Once the contract is signed, it is typically binding on both the union and the employer. Thus, the collective bargaining agreement is what makes an employer have a union or agency shop and acts as the cornerstone of the union-employer relationship.

There are a few common characteristics of unions. Generally, unions are:

  • Democratic: Unions are democratically governed. This means that union members elect their leaders and have a say in how the union is run.
  • Collective: Unions bargain collectively with employers on behalf of all union members.
  • Not-for-profit: Unions do not exist to make a profit for their leaders or members.
  • Federal: Unions are regulated by federal labor laws.
  • Specific to a particular industry or job: Unions represent workers in a particular industry or occupation.

There are also various aspects across different types of unions that are not the same. One example of this is known as a union security clause. This is a clause in a union contract that requires employees to either join the union or pay the union a fee. Some types of unions have this clause while others do not. Another example is exclusive representation. This means that a union is the only bargaining agent for all employees in a particular unit which gives the union more power to negotiate on behalf of the employees. The following sections will explore some of the different types of unions that exist.

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  • 0:32 Collective Bargaining…
  • 1:13 Closed Shop
  • 1:36 Union Shop
  • 2:19 Open Shop
  • 2:49 Agency Shop
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Types of Union Arrangements

There are a few main types of union arrangements that are commonly seen. These are known as closed shop, union shop, open shop, and agency shop arrangements. All of these arrangements have a few things in common. First, they all involve a contract between the union and the employer. This contract sets forth the terms and conditions of employment. Second, they all involve a collective bargaining agreement. This agreement sets forth the rights and duties of both the union and the employer. Finally, they all involve a system of dues and fees that are paid by the employees.

The main difference between these arrangements is the extent to which employees are required to join the union and how they handle union membership. In some of these arrangements, such as the closed shop, all employees are required to join the union. In other arrangements, such as the open shop, employees are not required to join the union.

Closed Shop

A closed shop is an arrangement in which all employees must join the union as a condition of employment. This means that an employer can only hire employees who are already members of the union. For example, Company X has a closed shop agreement with the XYZ Union. This means that Company X can only hire employees who are already members of the XYZ Union. If a potential employee is not a member of the union, they will not be able to get a job at Company X.

Closed shops were once very common, but they were made illegal in the United States with the passing of the Labor-Management Relations Act. This act made it illegal for employers to require employees to join a union as a condition of employment. There were several reasons why closed shops were made illegal. First, they were seen as a way for employers to avoid hiring employees who were not union members. Second, they were seen as a way for unions to keep out new members. Finally, they were seen as a way for unions to control the employment of their members. This essentially provided too much power to the union and not enough power to the employees.

Union Shop

A union shop is an arrangement in which employees must join the union within a certain period of time after they are hired. This means that an employer can hire employees who are not union members, but they will have to join the union within a certain period of time. The difference between this and a closed shop is that a closed shop requires employees to be union members before they are hired, while a union shop only requires them to join the union within a certain amount of time post-hiring.

For example, Company Y has a union shop agreement with the ABC Union. This means that Company Y can hire employees who are not union members, but they will have to join the union within 30 days of being hired. If an employee does not join the union within that time frame, they will be fired.

Union shops are still federally legal in the United States, but they are not as common as they once were. The main reason for this is that many states have passed right-to-work laws. These laws prohibit union shops by making it illegal for employers to require employees to join a union as a condition of employment. Right-to-work laws essentially make union shops illegal in those states. As of 2022, there are 28 right-to-work states in the United States.

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Frequently Asked Questions

What are the four types of unions?

There are four main types of unions: closed shop, union shop, open shop, and agency shop. Each type has different requirements for employees and employers as well as different benefits and drawbacks.

What is a union and what does it do?

A union is essentially an organization of workers who have banded together in order to negotiate with their employers for better wages, benefits, and working conditions. Unions use a process called collective bargaining to try to get the best possible deal for their members. In the United States, unions are also involved in politics and lobbying in order to try to advance their agendas.

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