Supreme Court Unblocks Cases on “Pejotização” and Resumes Hearing on Legal Aid: What This Means for Businesses
Two recent decisions by the STF are expected to put thousands of labor cases back on track and could significantly alter the cost of litigation for companies.
Although no final decision has yet been made on any of these issues, the measures are already having tangible effects: cases involving the “pejotização” practice are once again being heard across the country, and the Supreme Federal Court (STF) has resumed proceedings that could restrict access to free legal aid in the Labor Courts as well.
The first of these concerns the “pejotização” issue, Case No. 1,389, with Justice Gilmar Mendes serving as the reporting justice.
Since April 2025, the STF had ordered a nationwide suspension of cases addressing the legality of hiring legal entities and self-employed workers (Issue No. 1,389). In a decision dated June 18, 2026, however, Justice Gilmar Mendes relaxed this measure, allowing cases to proceed normally in the lower courts, including the presentation of evidence, the holding of hearings, and the rendering of judgments, with only appeals to the Superior Labor Court (TST) remaining suspended.
With this decision, more than 50,000 stalled cases are back thereby resuming trading. In practice, this means that companies that had been monitoring these stalled proceedings should immediately resume bearing the operational costs of the litigation, while also facing an increased risk of conflicting decisions among the various courts.
The second concerns legal aid, with the reinstatement of the hearing on Constitutional Noncompliance Action (“ADC”) No. 80, with Justice Edson Fachin serving as the reporting justice, to the agenda of the in-person plenary session, with the aim of establishing criteria for granting legal aid benefits across all branches of the judiciary.
The virtual trial began on November 28, 2025. It resumed in April 2026, with Justice Gilmar Mendes dissenting—he proposed limiting the presumption of financial need to those earning up to R$ 5,000.00 per month, with the burden of proof falling on those who exceed that threshold—and resulted in a 5-1 vote in favor of the more restrictive interpretation.
The rapporteur himself requested that the case be given priority on April 8, 2026, resetting the vote count to zero. After oral arguments on May 21, 2026, the case was once again placed on the STF’s official docket, although the vote has not yet been concluded.
This discussion has the potential to alter the economic dynamics of labor litigation, reducing incentives for lawsuits with a lower probability of success and affecting the volume of new lawsuits.
If the currently prevailing, more restrictive position prevails, there could be a significant decrease in the number of labor claims filed under the pro bono system, as the claimant’s financial risk would increase in the event of a loss. For companies, this could have implications for both their litigation strategy and their assessment of provisions and contingencies.
Consolidated overview:
| THEME | TIMELINE (MILESTONES AND DATES) | PRACTICAL IMPACT | SPLIT FORECAST |
| “Pejotização“ Case No. 1,389 (ARE 1,532,603 — Justice Gilmar Mendes) | •April 2025: Nationwide stay ordered by the reporting judge, halting all proceedings regarding the legality of hiring by legal entities or self-employed individuals in all courts. •June 18, 2026: A single-judge decision partially revokes the stay—Labor Courts and Regional Labor Courts (TRTs) resume taking evidence, holding hearings, and issuing judgments and rulings. •Any appeals to the Superior Labor Court (TST) remain suspended until the Supreme Federal Court (STF) issues its final ruling. | More than 50,000 pending cases are back on the docket. Companies that use contractors or legal entities (in the technology, healthcare, and commercial representation sectors) should expect an immediate increase in hearings, the production of evidence, and decisions at the first and second instance levels—with the risk that an employment relationship may be recognized even before the Supreme Federal Court (STF) issues its final ruling. | No date has been set for the hearing on the merits of Case No. 1,389. Each case will proceed to the Regional Labor Court (TRT); from that point on, it will be suspended again. |
| Legal Aid ADC No. 80 (Art. 790, §§3 and 4, CLT — Reporting Justice Edson Fachin) | •November 28 –December 5, 2025: Start of the trial in the virtual plenary session—Fachin votes in favor of the constitutionality of the CLT rules, allowing for self-declaration of financial vulnerability. • April 3-13 , 2026 : Virtual resumption — Gilmar Mendes dissents: presumption of indigence only up to R$ 5,000, applicable to the entire Judiciary, with a declaration of unconstitutionality of Precedent 463, I, of the TST. Zanin, Moraes, Dino, and Toffoli concur (5-1 vote). •April 8, 2026: Fachin requests that the matter be given priority, resets the vote count, and refers the case to the full court. •May 21, 2026: In-person session with oral arguments by the parties and nine amici curiae (Consif, AGU, CNI, CUT, FIESP, DPU, ANADEP, among others); the hearing was suspended due to the late hour. •The case is once again included on the agenda for the STF’s in-person plenary session scheduled for August 26, 2026. | A more restrictive rule (a cap of R$ 5,000, with the burden of proof falling on those who exceed it) is likely to reduce the volume of labor claims, which is currently at a record high (4 million cases in 2024). If confirmed, this effect would apply to all branches of the judiciary, not just the labor courts. | A new session is scheduled for August 26, 2026, for the vote and the announcement of the results. |
Although the STF has not yet ruled on the merits of any of the disputes, both cases are already changing the landscape of labor litigation. On the one hand, thousands of lawsuits regarding the “PJOTIZAÇÃO” practice are resuming their normal course, with new decisions expected before the binding precedent is established. On the other hand, a possible revision of the criteria for legal aid could significantly alter labor litigation and the economic profile of new claims.
Therefore, companies need to monitor the situation closely at this time, as the practical effects will be felt before the final outcome of the trials is determined.
What should companies do now?
✔ Review the strategy adopted regarding the “pejotização” cases that were suspended, especially those in the preliminary investigation phase.
✔ Organize the evidence to be presented, such as witness testimony and documentary evidence, as hearings may be rescheduled soon.
✔ Monitor the ruling on ADC No. 80, which could significantly alter the cost of filing new labor claims.
✔ Reassess accounting provisions and settlement strategy based on the progress of the two trials.
Our Labor Law Team at Araújo e Policastro Advogados is available to answer any questions or provide further clarification.
