closed shop

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 United States outlawed the practice of closed shops with the Taft-Hartley Act of 1947. 

In response to the Taft-Hartley Act, many unions advocated for union shops, which is a similar arrangement to a closed shop. In a union shop, joining a union is not a prerequisite for employment; however, employees faced termination if they failed to join the union and/or pay union dues within a given number of days after hiring. 

The Supreme Court ruled in Janus v. AFSCME Council 31, 585 U.S. 878 (2018), that union shop arrangements requiring public employees to subsidize a union is a violation of the non-consenting employee’s First Amendment rights to free speech. The Court held that states could not require public-sector unions to attempt to collect union dues from non-consenting employees. 

[Last reviewed in April of 2026 by the Wex Definitions Team]

Wex

• COMMERCE
• commercial activities
• LIFE EVENTS
• employment
• labor law
• wex definitions
• employment law