A closed shop is an arrangement whereby a place of employment requires current membership in a specific union as a condition of employment. While initially permitted, the practice of closed shops has since been outlawed by the Taft-Hartley Act of 1947.
In response to the Taft-Hartley Act, many unions pushed for closed shops with advocacy for the similar union shops. In a union shop, joining a union is not a prerequisite for employment; however, any employee who fails to join the union and/or pay union dues within a given number of days after hiring will be terminated.
In 2018, the Supreme Court ruled in Janus v. AFSCME that union shop arrangements are themselves illegal. “The Court concluded that the practice of states and public-sector unions collecting agency fees from nonconsenting employees was a violation of the First Amendment, and that no further agency fees or other forms of payment to a public-sector union could be collected, nor could attempts be made to collect such payments from employees without their consent.”
[Last updated in July of 2022 by the Wex Definitions Team]