IBM Brazil workers won IT status after challenging their classification

IBM was registered as a sales company in Brazil even though its main activity was software development. That classification left workers outside benefits for tech employees, including a shorter workweek, a higher minimum wage, overtime pay, and profit participation. In 2015, the IT workers' union in Minas Gerais sued.

The union argued that IBM's actual business, including its membership in the Brazilian Association for Information Technology and Communication Companies, contradicted the sales label. In 2018, a regional court ruled for the union and forced IBM to recognize it as the legal representative of IBM employees in the state.

The local win became a template for further action. Unions in Paraná and São Paulo pursued similar claims, while the Minas Gerais union represented roughly 600 IBM employees. The union estimated the unpaid amount at tens of millions of reais, although IBM disputed the claims and the correct calculation remained unresolved.

The Minas Gerais union won recognition of IBM's local workers as IT employees, opening claims to shorter hours, higher minimum pay, overtime, and profit participation.

The sales classification denied workers statutory benefits that applied to technology employees.

The union focused on IBM's actual activity—software development—rather than accepting the company's self-reported label.

Brasscom membership gave the court a concrete indicator that IBM belonged to the technology sector.

A favorable ruling created a legal precedent that other state unions could use against IBM and related companies.

When a legal classification conflicts with the work people actually do, a focused local case can create a broader compliance and cost problem for the employer.

IBM said it opposed discrimination and would defend against the claims. The company later barred Minas Gerais residents from applying for a remote job, prompting complaints and a public civil action seeking $3.9 million in collective moral damages. The Minas Gerais workers had still received no compensation when the report was published; Paraná had sued in 2021, and São Paulo's union was waiting for another favorable decision before trying again.