Agency Shop

Workplace where an employee, to retain his job, must pay a fee to the union ( www.practicallaw.com/2-502-9592) representing him in collective bargaining ( www.practicallaw.com/4-382-3347) within a time frame specified by the employer and the union. This fee is equivalent to the union's customary initiation fees and monthly dues.

Unlike employees in a union shop ( www.practicallaw.com/3-508-5479) , employees in an agency shop are required only to pay dues. They need not:

  • Become members of the union.

  • Follow any internal union rules.

A union may form an agency shop by negotiating for a collective bargaining agreement ( www.practicallaw.com/4-504-1300) clause, which requires an employer to remove an employee from a union-represented position at the union's request if the employee does not pay fees to the union for the union's collective bargaining efforts on his behalf within a specified time. This period is often one month after hire or transfer into a position represented by the union.

The clause is generally called an agency shop clause and the fee is often called an agency fee or fair-share fee. The agency shop clause is one of several types of union security clauses ( www.practicallaw.com/5-508-5483) historically used to ensure that employees are excluded from the bargaining unit if they either:

  • Do not support the union.

  • Do not wish to pay union dues associated with union membership.

  • Do not want to pay fees associated with a union representing the employees' bargaining unit.

States may enact right-to-work laws ( www.practicallaw.com/7-508-5019) prohibiting employers and unions from forming agency shops.

For more information, see Practice Notes:

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