Litigation

The Brazilian Supreme Court establishes a precedent regarding the inclusion of companies from the same economic group in labor law enforcement proceedings.

In the judgment of Extraordinary Appeal No. 1,387,795, the Supreme Federal Court established the binding precedent regarding Topic No. 1,232, with recognized general repercussion.

The Supreme Court established that the enforcement of a labor court judgment cannot be directed against a company that was not part of the passive side of the action during the cognizance phase of the process. In other words, if the company was not a party to the original labor claim, it cannot be included only in the enforcement phase.

The judgment, under the general repercussion regime, sought to standardize the interpretation of the redirection of execution and define the procedural and material requirements that must be observed.

In the opinion of the rapporteur, Minister Dias Toffoli, the inclusion of a legal entity belonging to the same economic group, but which did not participate in the cognizance phase, requires the initiation of an incident of disregard of legal personality, guaranteeing the right to a fair hearing and full defense.

The Brazilian Supreme Court did not completely exclude the possibility of including third parties in the execution process, but restricted its use to exceptional situations, such as cases of business succession or abuse of legal personality, according to the rules of the law on piercing the corporate veil.

The new guidance requires the plaintiff to indicate, in the initial petition initiating the enforcement phase, all jointly liable legal entities against whom they intend to direct the execution, demonstrating the legal requirements for such inclusion. This ruling has immediate application to future cases, but does not affect decisions that have already become final.

The decision represents a milestone of greater legal certainty and predictability for companies, preventing those that never participated in the initial phase of the proceedings from being surprised by seizures and collection of labor debts.

Link to the case in the STF (RE 1.387.795):
https://portal.stf.jus.br/processos/detalhe.asp?incidente=6422105

Cássia Menezes Marques | cassia@nascimentomourao.adv.br
Lawyer, Partner in the Strategic Litigation and Compliance Officer area.

Aline Rossi | aline@nascimentomourao.adv.br
Partner Coordinator of the Strategic Litigation area, specialist in Civil Procedural Law and Contracts.

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