Brazil Court Orders Retailer Casas Bahia to Rehire Workers

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On August 18, 2026, Judge Katarina Roberta Mousinho de Matos of the 11th Labor Court of Brasilia ordered retail chain Grupo Casas Bahia to reverse mass layoffs conducted in August and restore affected employees to the payroll within five days. The ruling followed a lawsuit filed by the National Confederation of Commerce Workers (CNTC), which argued the company failed to engage in mandatory union negotiations required by the Supreme Court precedent Tema 638. The retailer, which recently filed for court protection from creditors, must also restore health benefits for the affected staff within 48 hours or face daily fines of R$500 per worker. This order impacts a significant downsizing effort that had already seen the closure of 298 stores and the loss of approximately 1,900 to 3,000 jobs in August alone.

Consequences

The company faces increased financial pressure as it must simultaneously navigate court-ordered payroll restoration while managing a broader restructuring process that has seen the elimination of 11,600 jobs and 355 stores since 2023. Failure to comply with the labor court's injunction carries immediate financial penalties, further complicating the retailer's efforts to stabilize its operations under its concurrent bankruptcy protection proceedings.

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