In terms of United States labor relations, an open shop is a place of employment at which one cannot be required to join a labor union as a condition of hiring or continued employment. Open shops are required by law in right-to-work jurisdictions and employers such as the U.S. federal government. An open shop is the opposite of a closed shop, one in which all employees must be members of a union to be employed or a union shop, the form of union security arrangement permitted by the National Labor Relations Act and the Railway Labor Act, in which an employee must pay dues or their equivalent to the union, but may not be fired if he or she fails to maintain membership in good standing in the union for any reason other than failure to pay such dues.
The "open shop" as a slogan
The open shop was the slogan adopted by United States employers in the first decade of the twentieth century in their attempt to drive unions out of the construction industry. Construction craft unions, then and now, rely on controlling the supply of labor in particular trades and geographical areas as a means of maintaining union standards and establishing collective bargaining relations with the employers in that field. In order to do that, construction unions—and to a lesser extent unions representing musicians, longshore workers, restaurant employees and others who work on a transitory and relatively brief basis—must require that employers hire only their members. By refusing to hire exclusively union members, construction employers effectively undercut many of the conditions, such as the eight hour day , that unions had achieved over the past several decades.
The open shop was also a key component of the American Plan introduced in the 1920s, when employers attempted to reverse the gains made by unions during World War I. In that era the open shop was not only directed at construction unions, but also unions in mass production industries; the open shop represented not only the right to discriminate against union members in employment but also a steadfast opposition to collective bargaining of any sort.
The legal status of the open shop
United States labor law outlaws the open shop in its extreme form, in that it prohibits private sector employers from refusing to hire employees because they are union members. This is still significant in the construction industry in which construction employers frequently impose obstacles to keep union members out of their workforce. Construction unions, for their part, have used this as a weapon against targeted employers by sending "salts", union members sent to a non-union contractor in the hope that the employer will either discriminatorily refuse to hire them, thereby leading to potentially significant financial liability on the employer's part for this unfair labor practice, or will hire these members, giving the union a foothold in attempting to organize it.
In its milder form, in which the open shop only represents an employer's refusal to favor union members for employment, the open shop is legal. While the National Labor Relations Act permits construction employers to enter into pre-hire agreements, in which they agree to draw their workforces from a pool of employees dispatched by the union, employers are under no legal compulsion to enter into such agreements.
Non-union construction employers have adopted the phrase "merit shop" to describe their operations. In the view of construction unions, "merit shop" is merely a codeword that signifies the extreme form of the open shop, that is the systematic refusal to hire union members in order to undermine the prevailing standards established through collective bargaining. "Merit shop" employers have attempted to establish non-union apprenticeship programs of their own in order to build up the same sort of pool of non-union employees who can be hired without the risk entailed in hiring construction workers whose union background and sympathies are unknown.
The open shop is also, as noted above, the legal norm in those states that have adopted "right-to-work" statutes. In those cases employers are barred from enforcing union security arrangements and may not fire an employee for failure to pay dues under a union security clause that might be lawful in another jurisdiction.