Pejotização: the jurisdiction dispute running beneath the merits

The public debate on pejotização revolves almost entirely around the merits: is that contract between legal entities legitimate, or does it conceal a fraudulent employment relationship? That is the hard question, and it remains open. Yet there is a second, quieter question that often decides the course of a case before the merits are even reached: who judges?

The quiet question: who judges

A recent survey indicates that Brazil's Federal Supreme Court (STF) has ruled more than 400 times, between 2021 and 2026, that discussing the validity of civil and commercial contracts between companies is, as a rule, a matter for the ordinary courts, not the labor courts. The recurring rationale is that legitimate models of business organization cannot have their effectiveness set aside outside the constitutionally competent court. In other words: a valid commercial contract is not, in itself, a labor matter.

More than 400 decisions, but not a binding thesis

Here lies a technical caveat that often goes unnoticed. These rulings are, for the most part, single-justice decisions issued in constitutional complaints (reclamações). A reclamação is not a binding thesis with general repercussion. What this volume reveals is a strong and consistent trend, not a final word. Ignoring this distinction leads to hasty readings in either direction.

The merits still depend on Theme 1,389

The final word on the merits is still to come. It lies in Theme 1,389 (reporting Justice Gilmar Mendes), which addresses precisely jurisdiction and the burden of proof in these disputes. The theme remains pending a thesis: there was a request to review, the nationwide suspension was only partially lifted, and a large volume of actions remains awaiting the decision, especially at the Superior Labor Court (TST). This is a moment of transition, not of conclusion. (We addressed Theme 1,389 and the suspension in another Insight.)

Why the competent forum matters

The competent forum is not a procedural detail. It carries with it:

• the principles that guide the judgment;
• the logic for distributing the burden of proof;
• the body of precedents of each branch of the Judiciary.

The same contract, with the same facts, can be read differently depending on the competent court. That is why defining the forum is often the strategic discussion running beneath the more visible debate over the merits.

Jurisdiction is not the merits

A necessary note, to avoid any mistaken reading: jurisdiction is not the merits. Nothing in this scenario means that the STF has legalized pejotização, that it has become safe, or that the risk is gone. The lawfulness of each engagement still depends on the concrete facts, on the substance of the relationship and, nationally, on what the STF establishes in Theme 1,389.

A legitimate institutional tension

It is worth acknowledging, with sobriety, that there is an institutional tension underway. Labor magistrates' associations have taken positions, and the topic touches the very constitutional design of jurisdictions. It is a serious discussion, about the allocation of powers among branches of the Judiciary, and it deserves to be treated as such.

What sustains lawfulness, in any forum

Whatever the competent court, what sustains a contractor or PJ engagement when challenged is always the same: consistency between what the contract states and how the relationship is actually lived day to day; documentation of autonomy (invoices, deliverables, absence of the typical marks of subordination and personal performance); and periodic review of engagements, before litigation appears. This is preventive work, and it does not depend on who ends up judging.

How the firm works

Structuring and reviewing service agreements, as well as defending companies in cases discussing employment bonds, pejotização and jurisdiction, are part of the firm's corporate employment practice. Each case, however, depends on its own circumstances, the facts and the documents.

Conclusion

The picture is one of a clear trend on jurisdiction and a still-pending definition on the merits. For the company, the prudent position is the usual one: contract with consistency between the written and the lived, document autonomy and review periodically, without mistaking a forum dispute for a safe-conduct. The quiet question (who judges) matters; but it does not replace the underlying question (is the engagement lawful), which still depends on each case and on the Supreme Court's final word.

Reference basis for review

• Federal Constitution, Article 114, on the jurisdiction of the Labor Justice.
• STF, Theme 1,389 with general repercussion (ARE 1532603, reporting Justice Gilmar Mendes), on jurisdiction and the burden of proof in disputes over the lawfulness of engaging PJ and independent contractors, pending a thesis.
• Constitutional complaints (reclamações) decided by the STF between 2021 and 2026 concerning jurisdiction to discuss the validity of civil and commercial contracts between companies, and ADPF 1,149 (reporting Justice Cármen Lúcia).
• Brazilian Bar Association Rule (Provimento OAB No. 205/2021), to preserve the informational nature of the content.

Content of a merely informational nature. It does not constitute legal advice, an offer of services or a promise of results. Any concrete analysis depends on the facts, the documents and the context of each engagement.