The Brazilian Federal Supreme Court (STF) has suspended all ongoing cases in the country that question the “pejotização.” On April 14, 2025, Minister Gilmar Mendes, rapporteur for case (ARE) 1532603, acknowledged that the controversy over the validity (or otherwise) of service contracts (PJ) has overburdened the STF and ordered a nationwide suspension of cases discussing the issue.
With this decision, all labor lawsuits in the country discussing “pejotização” must be suspended until the STF’s decision in the case, which will have general repercussions (theme 1389), mandatorily applying to all cases, consolidating the Brazilian judiciary’s understanding on the matter.
But in business practice, what changes?
Certainly, the long-awaited position of the STF is not just a legal debate, but an issue that affects business strategy, since it will judge the validity (or not) of hiring a legal entity to provide services that, in practice, involve requirements that may characterize an employment relationship.
The STF’s decision to suspend labor lawsuits in Brazil has the positive effect of seeking to standardize understandings on a very important issue, providing legal certainty and predictability in this area, which has been lacking until now.
Thus, for companies that adopt contractual structures with service providers (PJ), the suspension of proceedings does not eliminate the risks, but creates an important window of opportunity to evaluate their strategy.
This is, therefore, a time for analysis, review, and, if necessary, reorganization. The focus should be on seeking measures to strengthen the integrity of existing contracts, paying attention to critical points:
- Clarity in the description of the services to be provided, as well as in the technical autonomy of the activity to be performed;
- Formal existence of free expression by the parties on the contracting format;
- Absence of elements that indicate subordination, direct control, or insertion in the company’s hierarchical chain;
- Existence of clauses for risk management by the service provider;
- Actual compliance between operational practice and formalized contractual terms;
In addition, with the STF’s position, companies may face a sudden increase/reduction in labor liabilities, which requires a real assessment of the risks and costs involved in structuring the contracting of legal entities (PJ).
In this context, it is recommended that companies adopt assessment and prevention measures immediately, taking advantage of the opportunity to optimize existing relationships and strengthen contractual guidelines in line with the current decisions of the Federal Supreme Court, and, to the same extent, assess the impact of existing labor liabilities.
If you have questions on this matter, please contact our team.