What is an Open Shop? Definition, Explanation, 10+ Facts

An open shop is a location of employment where union membership or financial support is not needed as a condition of hiring or ongoing employment (closed shop).

What is an Open Shop?

Open shops are places of employment where employees are not compelled to join or participate in a labor union in order to be employed or to continue working. An open shop is ideally accessible to both unionized and non-unionized workers.

What is an Open Shop?

Open shops are places of employment where employees are not compelled to join or participate in a labor union in order to be employed or to continue working. An open shop is ideally accessible to both unionized and non-unionized workers.

Throughout the years, the notion of the open shop has been a continuing source of controversy, in part owing to instances in which employers attempted to utilize the model to favor non-unionized staff over those who were members of labor unions.

Open shops Legal

In nations where the concept of an open shop is prevalent, rules and regulations are often organized such that proprietors of open shops cannot be compelled to hire exclusively unionized workers.

Instead, firms are free to seek out applicants who are eligible for available positions, basing their hiring decisions on the merit of the applicant.

The goal is to make union membership irrelevant to the recruiting process, so allowing the human resources management team to evaluate all applicants based on abilities, work history, pay requirements, and other essential hiring process considerations.

Proponents of the Open Shop

According to proponents of the open shop, this strategy creates an atmosphere in which union membership is not sufficient to guarantee employment.

This line of reasoning typically takes the example of a unionized worker who is moderately competent, but lacks the skills and background of a non-unionized applicant for the same position.

Since it is in the employer’s best interest to hire the candidate who is viewed as a larger addition to the organization, a corporation with an open hiring policy would ostensibly hire the better qualified candidate.

If the company is a union workplace, the candidate with the highest qualifications will not be evaluated unless he or she is prepared to join the union.

What is an Open Shop?


Those who favor labor unions tend to reject the open shop concept. It is usual for union supporters to cite instances in which employees were subjected to excessive hours, poor pay, and substandard working conditions.

Since open shops are not accountable to unions in terms of compensation, benefits, and working conditions, employees who are exploited have little remedy other than to leave and look for work elsewhere.

Factor That Has Made The Open Shop a More Viable Option

One of the things that has made the open shop a more feasible choice, even for unionized workers, is that many nations have implemented laws that provide employees with a level of protection that was not accessible in prior decades.

Depending on the nature of these rules, companies may be required to pay an hourly minimum wage, give overtime compensation, and maintain a safe work environment.

While these laws have improved working conditions in general, not everyone feels that the improvements are adequate, and some argue that unions are the only option.

Open shop vs closed shop

The demand for union membership distinguishes closed shops from open shops. Regarding the positives and drawbacks of open stores, several viewpoints exist.

Pros vs. cons of open shops

In the United States, the implementation of “right to work” laws has been associated by some proponents with lower total benefits but better economic growth.

However, such results are problematic because employment, investment, and income in historically unionized areas of the economy cannot be associated with the passing of such legislation.

Union arguments

Open shop refers to a factory, office, or other commercial institution in which a union, chosen by a majority of the employees, acts as representative of all employees in negotiating with the employer, but union membership is not a requirement for employment.

Unions have opposed the open shop implemented by United States companies in the first decade of the twentieth century, viewing it as an attempt to eliminate unions from industries.

As a method of sustaining union standards and building collective bargaining relationships with the employers in their industry, construction craft unions have historically focused on controlling the supply of workers in certain crafts and geographical areas.

What is an Open Shop?

In order to do this, unions contended that construction unions—and, to a lesser extent, unions representing musicians, longshore workers, restaurant personnel, and others with transient and temporary employment—must demand that businesses recruit only their members.

The open shop was also a crucial element of the American Plan of the 1920s. During that time, the open shop was not just intended at construction unions, but also against unions in mass manufacturing industries.

Unions believed that the new laws would provide employers the ability to discriminate against union members in the workplace and would also result in a persistent hostility to collective bargaining of any kind.

Legal status

The extreme version of the open shop is prohibited under U.S. labor law, which forbids private sector employers from refusing to recruit employees because they are union members and prohibits discrimination against employees who do not desire to join unions.

Legal is the open shop in its milder version, when the open shop symbolizes just an employer’s unwillingness to favor union members for employment.

Although the National Labor Relations Act authorizes construction firms to enter into pre-hire agreements in which they agree to draw their workforces from a pool of workers dispatched by the union, businesses are not required by law to participate into such arrangements.

Employers in the non-union construction industry have embraced the term “merit shop” to characterize their operations. In many senses, the phrases are equivalent; yet, they may be employed differently by opposing parties to the open shop issue.

In places where right-to-work legislation have been established, the open shop is also the legal norm. In such situations, employers are prohibited from enforcing union security agreements and may not terminate an employee for failing to pay union dues.

Legal is the milder form of the open shop in which the employer does not give preference to union members for employment.

Although the National Labor Relations Act permits construction companies to enter into pre-hire agreements in which they agree to draw their workforces from a pool of individuals dispatched by the union, employers are not obligated to do so.

Employers in the non-union construction industry have used the phrase “merit shop” to describe their operations. However, different parties in the open shop dispute may use the terms differently.

In locations where right-to-work legislation has been enacted, the open shop is also the legal norm. In such cases, employers are banned from implementing union security agreements and may not dismiss an employee for nonpayment of union dues.

What is an Open Shop?


Open shop is also used similarly in Canada, primarily in reference to construction companies with at least some non-union employees. The Canadians’ freedom of association is guaranteed under the Canadian Charter of Rights and Freedoms, which implicitly includes the right not to associate.

Certain “open shop” associations have arisen in various Canadian provinces. Numerous of these groups assert that present labor legislation does not effectively protect small contractors.

As employment law is a provincial responsibility in Canada, provincial regulations differ. There is, nevertheless, some shared ground.

In Ontario, the Liberal government has recently[when?] reinstated the card-based certification system that was in effect for the majority of the post-World War II era, despite resistance from open shop contractors.

Only the construction industry resumed card-based certification. It enables employees to certify an exclusive negotiating agent based on membership, sometimes known as “majority sign-up.”

According to some observers, this arrangement increases the possibility that employees would be mislead by corporate representatives. Others argue that it eliminates the inherent advantage that anti-union companies have over their workforce.

Some of these groups welcome unionized construction companies as members. Several firms whose employees are represented by the Christian Labour Association of Canada or CLAC, a non-traditional union, are members of the association. The Christian Labor Movement in the Netherlands is the origin of CLAC.

Janus v. AFSCME

Janus v. American Federation of State, County, and Municipal Employees, Council 31, US (2018) is a US labor law case that considers whether governments violate the First Amendment when they force their employees to pay union fees as a condition of employment.

Bruce Rauner, the Republican governor of Illinois, launched a lawsuit in February 2015, alleging that fair-share agreements are unconstitutional and a violation of the First Amendment’s free speech guarantee.

In March 2015, three Illinois government employees represented by the Liberty Justice Center and the National Right to Work Legal Defense Foundation intervened in the lawsuit.

In May 2015, Governor Rauner was dismissed from the case when a federal court decided that he had the legal capacity to initiate such a claim.

However, the case continued under the name Janus v. AFSCME. Mark Janus, an Illinois child support expert protected by a collective bargaining agreement, is honored by this case.

What is an Open Shop?

Janus argued that he should not be required to pay fees to the American Federation of State, County, and Municipal Employees because doing so would amount to financing political speech with which he disagrees.

In 1977, the Supreme Court of the United States ruled in Abood v. Detroit Board of Education that this was legal. The lawsuit was decided in favor of Janus, and as a result, non-union members cannot be required to pay fees in line with an existing fair-share agreement pertaining to a union.

How Open Shops Motivate Competition And Drive Value In The Construction

Unions have been involved with preserving industry standards and safeguarding labor rights during the previous century.

However, recent trends imply that open shop regulations may be more effective at promoting an inclusive and competitive atmosphere in which contractors may apply multiskilling and other streamlining strategies.

An open shop construction policy, also known as a merit shop, is a workplace that allows prospective recruits and existing employees to choose whether to join a union, as opposed to making union membership mandatory, as in a closed shop.

In 2015, according to the U.S. Bureau of Labor Statistics, around 14 percent of construction workers were union members or non-union workers whose positions were covered by a union or employee association contract.

The Pros And Cons Of Open Shop Construction

The open shop principle safeguards the ability of employees to choose between union membership and non-membership.

The objective of unions, however, is to safeguard the rights and interests of employees. By organizing and fighting on behalf of employees, unions are quick to assert that open shops do not adequately safeguard the rights of construction workers.

Nonetheless, the Merit Construction Alliance, an organization committed to open shop construction, asserts that open shop enterprises not only provide year-round work, but also health insurance and other perks.

With close shop companies, unions control the supply of workers, which strengthens their capacity to maintain the highest industry standards and negotiate with employers collectively.

When corporations have the opportunity to hire non-union workers in addition to union members, they have less motivation to bargain with unions about working conditions, salaries, and other concerns.

How Open-Shop Policies Affect Prices

SAccording to a number of sources, open-shop rules influence the cost estimation of a project in a way that is advantageous to the customer.

What is an Open Shop?

The Merit Construction Alliance, for instance, asserts that open-shop enterprises may “deploy people more efficiently” because they are not constrained by “union construction’s cumbersome staffing rules.”

According to the partnership, some contractual terms and circumstances, such as “show up pay,” boost the price of building projects. When engaging with union contractors, public institutions may pay 14 to 20 percent more, while private entities may pay 30 to 35 percent more.

According to the Association of Builders and Contractors

Studies commissioned by union contractor associations and independent research companies reveal that merit shop contractors’ cost advantages over union enterprises are realized through the effective control of operational expenses and an innovative labor-management strategy known as multiskilling.

In contrast, unionized companies may be encumbered with rigid job categories that restrict how employees do certain job activities, hence lowering total productivity.

Contrary to common misconception, not all open-shop businesses are tiny or incapable of managing huge tasks. According to the Merit Construction Alliance, open-shop enterprises can vary in size and handle a wide range of projects.

We have executed more than 9,200 design-build projects to date. Our business philosophy dictates that the decision to collaborate with unions is decided based on what is best for the job, not what is best for the unions.

Since South Bay Construction resigned from the Carpenter’s Union almost nine years ago, we have the freedom to engage with open-shop subcontractors or unions, allowing us to maintain pricing competitiveness.

Estimating Cost

No matter whatever sort of contractor a person or organization selects, it is essential to have market knowledge in order to make the best option for any construction project.

South Bay Construction has established the Cost Reference Guide in order to assist construction professionals and prospective clients with current Bay Area market data and construction prices.

In addition to a printed version, the instructions may be downloaded as iPhone and Android applications. These programs deliver the pertinent, real-time data that industry professionals use to make educated choices.


Non union labor. Depending on your side of the fence, the number of open shop contractors and subcontractors has expanded, as have their talents.

Open shops were initially less expensive and less skilled than union businesses, as they were created in direct opposition to union shops. The gap between the open shop and the union shop has narrowed significantly in terms of both cost and skill.

Capitalistic incentives, such as competition, have necessitated that the union shops become more competitive and the open shops more professional.

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Pat Moriarty
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