On April 14, 2025, the Brazilian Supreme Federal Court (STF) issued a nationwide suspension of all lawsuits challenging the legality of hiring individuals through their own legal entities (commonly known as CNPJ structures) for the provision of services.
This decision was rendered under General Repercussion Theme 1389, and effectively halts the judgment of related labor cases at all levels of the Brazilian judiciary until a final and binding precedent is established by the Court.
The issue centers around service agreements widely adopted in sectors such as technology, healthcare, media, consulting, and entertainment. In these arrangements, professionals are formally engaged through personal companies, yet often work in conditions that closely resemble those of regular employees.
The suspension of these lawsuits offers a strategic opportunity for companies to reassess their contracting models and adopt preventative measures. The STF’s decision should not be interpreted as permission for indiscriminate use of CNPJ contracts, but rather as a pause for institutional and legal reflection.
Recommended actions:
1. Review existing agreements: Look out for clauses that imply exclusivity, direct oversight, or integration of the service provider into the company’s day-to-day operations.
2. Avoid signs of subordination: Ensure that service providers maintain operational autonomy and are not treated like employees (e.g., avoid giving direct orders or controlling working hours).
3. Assess economic dependence: Fixed monthly payments and the absence of other clients may be red flags pointing to an employment relationship.
4. Monitor the STF decision: The final ruling will have binding effect across the country and may reshape contracting practices.
This suspension marks a turning point in Brazil’s labor landscape, with the potential to redefine the boundaries between contractual freedom and labor protection, in light of the evolving nature of work in the 21st century. Companies acting in good faith and legal compliance should use this time to strengthen internal controls, update contractual models, and proactively mitigate risks — avoiding surprises once the STF’s binding precedent is established.
