The Casas Bahia case reignites debate about mass layoffs amid restructuring processes.

A preliminary injunction reverses the dismissal of approximately 1,900 workers and reignites the discussion on Supreme Court Case 638.

Between August 13 and 17, 2026, the Casas Bahia Group closed 298 stores and laid off approximately 1,900 workers in a concentrated manner, without prior union participation. Two days later, on August 16, the company filed for judicial reorganization in the 2nd Bankruptcy and Judicial Reorganization Court of the Central Civil Forum of São Paulo.

The National Confederation of Workers in Commerce filed a lawsuit alleging the absence of union intervention before the dismissals, and the 11th Labor Court of Brasília, of the 10th Regional Labor Court, granted an injunction suspending the collective dismissals, ordering the reinstatement of workers within five days and the reactivation of benefits within 48 hours. The decision also prohibited new collective dismissals linked to the operation without effective union participation, without imposing the reopening of the closed stores. On August 24, the 10th Regional Labor Court upheld the suspension after the company failed to present the documentation required in the writ of mandamus seeking to reverse the measure.

The case is noteworthy because it directly addresses the legal precedent established by the Supreme Federal Court in Case 638 (RE 999.435, with general repercussion): prior union intervention is an essential procedural requirement for the mass dismissal of workers.

The Supreme Federal Court itself made a point of clarifying, in the text of the thesis, that this intervention is not to be confused with prior authorization from the union, nor with the signing of a collective agreement or convention. In other words, the company does not need the union's approval to dismiss an employee, and the union does not have veto power over the decision.

What the thesis demands is that the union be called upon to participate in the process before the dismissals are finalized, in a space for dialogue that allows the entity to become aware of the measure and express its opinion on it while there is still room to influence how it will be implemented.

It is this dialogical and prior character, and not any requirement for agreement or formal negotiation, that defines the validity requirement established by the Supreme Court.

This episode highlights the practical importance of observing this requirement before carrying out mass layoffs. Recent court decisions show that the absence of prior union intervention can result in the suspension or annulment of layoffs and the order for reinstatement of workers, in addition to exposing the company to lawsuits seeking compensation for collective moral damages, even though the jurisprudence on the configuration of this damage is not uniform. In corporate restructuring processes, including those that precede or accompany requests for judicial reorganization, these developments represent additional legal and operational costs to those already faced by the company.

By Victoria La Maison