On April 14, 2025, Justice Gilmar Mendes ordered the nationwide suspension of all labor lawsuits questioning the legality of hiring independent contractors or legal entities, following the Supreme Federal Court’s recognition of general repercussion in ARE 1532603 RG/PR (Topic 1,389).
The decision applies to cases involving so-called “pejotização” (the outsourcing of employment via corporate entities) and criticizes the persistent resistance of the Labor Judiciary to follow the Supreme Court’s precedent regarding the validity of alternative contracting arrangements. It also suggests potential changes in jurisdiction and burden of proof.
Justice Mendes emphasized that the ongoing debate over the legitimacy of such agreements has led to an excessive number of cases reaching the Supreme Court, largely due to numerous challenges against Labor Court rulings that disregard the STF’s established position on the matter.
Although the case at hand concerns the recognition of an employment relationship between a franchisee insurance broker and an insurance company, the suspension is not limited to this specific scenario, as Topic 1,389 is expected to encompass similar cases.
The STF has increasingly acknowledged the legitimacy of various forms of contracting and, in some instances—with caveats—even questioned the Labor Court’s jurisdiction to rule on contractual invalidity claims.
Labor Courts are expected to issue official guidelines soon.
