Perez v. Paragon Contractors Corp., 233 F. Supp. 3d 1234

The Department of Labor sued Paragon Contractors and Brian Jessop over use of child labor; the parties settled and the court entered a permanent injunction prohibiting oppressive child labor under the FLSA.
After the Injunction, Paragon contracted to harvest pecans for Southern Utah Pecan Ranch; FLDS community children were used to harvest pecans from ~2008–2013 under pressure from church leaders.
Evidence showed Paragon and Jessop concealed child labor (signals to hide kids, instructing workers to lie, refusing to produce records, resisting subpoenas and inspections).
The court found Paragon and Brian Jessop in civil contempt for violating the Injunction after an evidentiary hearing that discredited defendants’ testimony.
As sanctions, the court appointed a five-year special master (at defendants’ expense) to monitor compliance, imposed reporting and entry/inspection requirements, and ordered defendants to pay $200,000 into an interest-bearing claims fund for alleged unpaid wages; defendants must replenish the fund if claims exceed the deposit.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a special master should be appointed to monitor compliance	DOL: special master needed to ensure compliance given defendants’ concealment and resistance	Paragon: unnecessary and burdensome; DOL can audit	Court: appoints special master for 5 years; defendants pay costs
Whether defendants must pay into a fund to compensate child workers	DOL: defendants failed to keep records; fund + claims process lets victims prove losses	Paragon: speculative, lacks evidence of who worked/how long; DOL would unilaterally disburse funds	Court: orders $200,000 deposit into interest-bearing fund; claims process administered by Wage Hour; defendants must replenish if needed
Whether to expand the permanent injunction to add FLSA minimum-wage/overtime/recordkeeping terms	DOL: requests amended injunction to coerce compliance with broader FLSA obligations	Paragon: expansion is improper as a contempt sanction	Court: declines to amend; coercive relief must target existing injunction, not create new obligations
Whether to stay or reconsider sanctions pending appeal	Defendants: seek stay and reduction of fund due to government seizure proceeds	Government: opposes stay; seized proceeds not available to defendants	Court: denies stay and reconsideration; temporary stay vacated

Shillitani v. United States, 384 U.S. 364 (court's inherent power to enforce orders through civil contempt)
McComb v. Jacksonville Paper Co., 336 U.S. 187 (civil contempt measured by full remedial relief)
O'Connor v. Midwest Pipe Fabrications, Inc., 972 F.2d 1204 (10th Cir.) (civil contempt sanctions: coercive vs. compensatory)
Rodriguez v. IBP, Inc., 243 F.3d 1221 (10th Cir.) (broad district-court discretion in contempt remedies)
Allied Materials Corp. v. Superior Prod. Co., 620 F.2d 224 (basis required for amount of compensatory contempt fine)
Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (employee burden of proof when employer fails to keep records)
Hilton v. Braunskill, 481 U.S. 770 (stay pending appeal factors)
Servants of Paraclete v. Does, 204 F.3d 1005 (10th Cir.) (standards for motion for reconsideration)