First, it is important to clarify what is meant by the term “pejotização”. This practice occurs when a worker provides services through a legal entity (PJ – Pessoa Jurídica, or corporate entity) rather than maintaining a formal employment relationship as an individual employee (PF – Pessoa Física).

Within this framework, both in theory and in practice, the service provider should not be subject to exclusivity, habituality, subordination, or working-hour control. Otherwise, the corporate arrangement may be disregarded, leading to the recognition of an employment relationship.

STF General Repercussion Theme No. 1,389 addresses this matter. The proceedings related to this issue had been suspended since April 2025 in order to avoid conflicting decisions and an excessive number of cases reaching the Supreme Court, since the STF’s final ruling will have binding effect throughout the Judiciary. A mandatory legal thesis will be established, directly impacting labor law jurisprudence and the organization of contractual relationships in the Brazilian market.

However, on June 18, 2026, Justice Gilmar Mendes of the Brazilian Supreme Court (STF) ordered the suspension to be lifted in cases involving pejotização. The decision was based on the understanding that the suspension had resulted in a significant backlog of cases, justifying the temporary resumption of proceedings before lower courts.

As a result, these cases may now proceed normally before both the first-instance Labor Courts (Varas do Trabalho) and the Regional Labor Courts (Tribunais Regionais do Trabalho – TRTs).

Therefore, cases that had been stayed may resume their course in these judicial instances. However, after the Regional Labor Courts issue their decisions, the proceedings may once again be suspended pending the STF’s final ruling on the matter. Consequently, this measure is temporary in nature.

Given the temporary character of this decision, once the STF definitively rules on General Repercussion Theme No. 1,389, a binding legal precedent will be established and must be applied throughout the Brazilian judicial system.

Accordingly, Justice Gilmar Mendes’ decision generates different impacts and risks for each sector. For workers, it reopens the possibility of obtaining judicial recognition of an employment relationship, while potentially accelerating the progress of ongoing lawsuits.

For companies, the decision means the resumption of labor disputes involving contractual arrangements with service providers operating through legal entities. It also increases the risk of conflicting decisions until the STF establishes a uniform interpretation. Employers may face labor-related liabilities based on factual analyses conducted by lower courts. Although such decisions may later be reviewed, they can already produce immediate financial and operational consequences. Therefore, companies should proactively review both their contractual structures and their operational practices in order to mitigate potential risks.

In conclusion, the STF’s decision does not resolve the merits of the controversy. Rather, it represents an important procedural measure aimed at reducing case congestion, returning the analysis of specific factual circumstances to the ordinary courts.

Nevertheless, differing decisions among Regional Labor Courts remain possible until the STF issues its final judgment. The debate regarding the legality of pejotização therefore continues, and there remains significant anticipation surrounding the final ruling on General Repercussion Theme No. 1,389, which is expected to settle the issue and establish a definitive framework for labor relations in Brazil.