backOn April 14, 2025, Justice Gilmar Mendes of the Brazilian Supreme Federal Court (STF) has ordered a nationwide suspension of all legal proceedings concerning the legality of hiring freelancers or independent contractors through business entities – a practice known as “pejotization.” The decision responds to a surge in labor lawsuits questioning such contracts, which are prevalent in areas like healthcare, IT, legal services, and delivery work. Mendes noted that the persistent disregard for STF precedents by labor courts has led to legal uncertainty and an overwhelming influx of appeals.
The case in question, Extraordinary Appeal with Aggravation (ARE) 1532603, was deemed to have general repercussion, meaning the final ruling will be binding across all Brazilian courts. Although the case involves a franchise agreement between a broker and an insurer, the court intends to address all civil/commercial contract types broadly. The suspension will remain in effect until the STF plenary delivers a final judgment on the matter.
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