957 F.3d 1156
10th Cir.2020Background
- In 2007 the district court permanently enjoined Paragon Contractors and its president Brian Jessop from using oppressive child labor in violation of the FLSA; Paragon did not contest the injunction.
- From 2008–2013 Paragon contracted to harvest pecans at a ranch and used hundreds of FLDS children; video and witness testimony showed widespread child labor and Paragon obstructed record-gathering.
- In 2015 the district court held Paragon in contempt and in 2016 ordered Paragon to fund a claims process to compensate eligible child workers for unpaid wages; a lockbox and claims process followed.
- The Department of Labor (DOL/Secretary) received 104 eligible claims (after excluding 16–17 year olds); many claim forms omitted days-per-week or weeks-per-season information.
- DOL filled gaps by using representative data from complete claims (using the mode as the ‘‘universal average’’) and submitted a schedule estimating $1,012,960.90 in back wages; the district court adopted DOL’s calculation and ordered Paragon to replenish the fund ($812,960.90 net).
- Paragon appealed, challenging (1) that DOL met its Mt. Clemens prima facie burden, (2) the burden and standard for rebuttal (including DOL’s statistical method), and (3) application of the 12–13 year-old farm exemption under 29 U.S.C. § 213(c)(1)(B).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Prima facie Mt. Clemens reconstruction | DOL: claims forms, witness testimony, video, and the lack of employer records suffice to show amount/extent by just and reasonable inference | Paragon: evidence/sample insufficient to establish amounts for all claimants | Court: DOL met Mt. Clemens prima facie burden given record gaps and Paragon’s lack of records; affirmed |
| Rebuttal burden & DOL’s gap-filling (mode vs mean) | DOL: used representative reported data and the mode to fill missing fields; methodology reasonable under Mt. Clemens | Paragon: mode/unrepresentative sample inflated estimates; employer met burden to specifically rebut inferences; mean or other methods preferable | Court: employer bears burden to specifically rebut reasonable inferences; Paragon failed to do so; district court did not abuse discretion (concurrence would remand limited claims) |
| Attribution of 2013 work to Paragon | DOL: many claimants reported work in 2013; inference Paragon was responsible | Paragon: contractual relationship ended in 2012; it did not work in 2013 | Court: Paragon offered only speculative evidence of cessation; insufficient to negate inference; attribution upheld |
| § 213(c)(1)(B) exemption for 12–13 year-olds | DOL: no written parental consent or proof of parental employment on same farm was produced | Paragon: claimed parental employment/consent or that children worked with parents so exemption applies | Court: exemption is an affirmative defense; employer must prove written consent or parental co-employment; Paragon failed to carry burden; exemption denied |
Key Cases Cited
- Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946) (establishes burden‑shifting standard for wage reconstruction when employer failed to keep records)
- Acosta v. Paragon Contractors Corp., 884 F.3d 1225 (10th Cir. 2018) (prior contempt/sanctions proceedings involving Paragon)
- Bledsoe v. Wirtz, 384 F.2d 767 (10th Cir. 1967) (failure to keep records shifts burden to employer to specifically rebut reasonable inferences)
- Donovan v. Simmons Petroleum Corp., 725 F.2d 83 (10th Cir. 1983) (sample/representative evidence can satisfy Mt. Clemens prima facie showing)
- FTC v. Kuykendall, 371 F.3d 745 (10th Cir. 2004) (standards of review for compensatory sanction amounts and legal methodology)
- Leerman v. Frontier Fire Prot., Inc., 685 F.3d 1151 (10th Cir. 2012) (statutory exemptions are affirmative defenses and employer bears burden)