By decision of the 4th Chamber of the Regional Labor Court of the 12th Region (TRT-12), the Labor Court may consider the members of a company as defendants in lawsuits as of the initial brief, if the enterprise has no equity to settle the debts.

Usually, the inclusion of members and ex-members of the companies as defendants is made only after the initial judgments of the lawsuits, in cases where there is a conviction. If the company does not have cash or assets that can be pledged to settle the debt, the creditor can ask the judge to initiate a procedure so that the execution also includes on the owners’ assets.

According to Raphael Zaroni, founding partner of Zaroni Advogados, ”the TRT’s understanding disregards the entire system on which the principle of equity separation between the company and members is based and is a direct violation of Brazilian law. This type of understanding discourages investment, impoverishes the country, increases inequality and harms workers who come to earn less so that companies may include this absurdity in the “Brazilian cost”.

Additionally, according to Raphael Zaroni, the disregard of the legal entity is a procedural act that cannot be decreed by the Judge. “The opening of this precedent represents a serious legal uncertainty for companies that operate in Brazil”, concludes the specialist.