Lawmakers in the state of Michigan, a cradle of the US labour movement, have passed a law limiting union power, amid mass protests at the statehouse.
Republicans, who control the state legislature, have succeeded in banning a requirement that workers pay union fees as a condition of employment.
Outside, police in riot gear used tear gas to control tensions among a crowd of more than 10,000 protesters.
Passage of the measure makes Michigan the 24th "right-to-work" state.
Bills sent by the House and Senate were signed into law by Michigan Governor Rick Snyder early on Tuesday evening.
An estimated 12,000 people turned out amid freezing temperatures to protest against the law, according to police estimates.
About 10 mounted officers and more than 40 state troopers were standing in lines two-deep, and used tear gas and pepper spray on demonstrators at least once, the Detroit Free Press newspaper reported.
The newspaper added that two protesters had been arrested for trying to force their way into the building where the governor's offices are located.
At one point the crowd tore down a tent that had been set up by Americans for Prosperity, a group that backed the legislation.
Inside the state capitol, protesters chanted "shame on you" as the first of two bills, which applied to public-sector workers, passed the chamber by a vote of 58-51.
Meanwhile, Democrats - who hold a 46-64 minority to Republicans - unsuccessfully tried to have the vote reconsidered.
Later, a similar measure for private-sector workers was passed in the House by a margin of 58-52, following its approval in the state senate last week.
One demonstrator, Valerie Constance, a member of the American Federation of Teachers, told the Associated Press: "I do think this is a very sad day in Michigan history."
Wrangles over right-to-work laws have played out over weeks in some states, but the bill passed in Lansing was rapidly pushed through only last week.
Correspondents say backers of the bill were emboldened after an attempt to enshrine pro-union collective bargaining rights in the state constitution during last month's elections failed badly.
Proponents of the right-to-work measure say it will bring more jobs and economic benefits to Michigan, while opponents say it will lead to lower wages.
John Proos, a Republican state senator who backed the bill, predicted public anger would abate because he said the new policy would bring new jobs to Michigan.
"As they say in sports, the atmosphere in the locker room gets a lot better when the team's winning," Mr Proos told the Associated Press.
In an interview with a local news outlet on Tuesday, Gov Snyder called the measure "good legislation", adding that it was designed to give workers a choice.
"This is about being pro-worker," he said.
President Barack Obama spoke out on Monday against the law during an appearance in Michigan to discuss a separate matter, his plan to avoid nationwide tax rises and deep spending cuts due to take effect next year.
"These so-called right-to-work laws, they don't have anything to do with economics; they have everything to do with politics," President Obama said.
"What they're really talking about is giving you the right to work for less money."
Opponents of right-to-work fear its passage in Michigan, home to the US car industry, could give the movement its biggest boost yet.
Although nearly half of US states have right-to-work laws, Michigan is only the second to pass such a law in the last decade, following Indiana earlier this year.