Legal Definitions - preferential shop

A preferential shop is a type of workplace arrangement, typically established through a collective bargaining agreement between an employer and a labor union. In this setup, the employer agrees to give preference to union members when hiring new employees. This means that if a qualified union member applies for a position, they will be considered before or given priority over a similarly qualified non-union applicant.

However, unlike a "union shop," employees hired who are not union members are generally not required to join the union or pay union dues as a condition of continued employment. The preference applies primarily at the point of hiring, rather than mandating union membership after employment begins.

• Example 1: Construction Project Staffing

  A large commercial construction company has a preferential shop agreement with a local electricians' union. When the company secures a new project and needs to hire additional electricians, they first contact the union's hiring hall and review applications from union members. If there are qualified union electricians available, they will be offered positions before the company considers applicants who are not union members. If the union cannot provide enough qualified personnel, or if the available union members do not meet specific project requirements, the company can then hire non-union electricians. Once hired, these non-union electricians are not obligated to join the union to continue their employment.

• Example 2: Manufacturing Plant Expansion

  An automotive parts manufacturing plant decides to open a new production line, requiring several new machine operators. The plant has a long-standing preferential shop agreement with the industrial workers' union. The human resources department first posts the job openings with the union and interviews qualified union members who apply. If a union member meets the job requirements, they are given priority for the position. Only if no suitable union members apply or are available will the plant open the hiring process more broadly to non-union applicants. Any non-union workers hired for the new line are not compelled to join the union to keep their jobs.

• Example 3: Event Management Company

  An event management company frequently hires temporary stagehands for concerts and festivals and has a preferential shop agreement with a local stagehands' union. When staffing an upcoming music festival, the company first reaches out to the union to request qualified stagehands. The union refers its members, who are given priority for the available roles. If the union cannot supply enough stagehands, or if the referred members are unavailable, the event company can then hire non-union stagehands from other sources. These non-union stagehands are not required to become union members to work the event.