Vasilios Zannikos v. Oil Inspections (U.S.A.), Inc, 605 F. App'x 349

Background

Oil Inspections employed three marine superintendents (Zannikos, James Cormier, William Cormier) to supervise and inspect oil cargo transfers, perform quality-control checks, oversee independent inspectors, and ensure compliance with safety/specification standards.
Plaintiffs alleged unpaid overtime under the FLSA; Zannikos filed suit in Aug. 2012; the other two joined; a conditional collective was certified for the prior three years for those without arbitration agreements.
At summary judgment the district court held plaintiffs were not covered by the FLSA administrative exemption, but that Zannikos qualified for the highly compensated-employee exemption beginning Jan. 2011; the court also applied the FLSA two-year statute of limitations for non-willful violations.
The court denied reconsideration; the parties settled remaining claims while preserving appeal rights; the Fifth Circuit reviewed the summary-judgment rulings de novo.
Central factual/legal dispute: whether the superintendents performed non-manual administrative work and exercised discretion and independent judgment for purposes of the administrative exemption; whether Zannikos met the $100,000 highly compensated exemption; and whether Oil Inspections willfully violated the FLSA.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether plaintiffs fall under the FLSA administrative exemption (29 U.S.C. §213(a)(1), 29 C.F.R. §541.200)	Plaintiffs: duties were production-like (e.g., line blending) or were the same services the employer sells, so not "office or non-manual work" and thus not administrative	Oil Inspections: plaintiffs performed non-manual, management-related quality-control and compliance work and exercised discretion and independent judgment	Held: plaintiffs performed non-manual, management-related work (second element met), but did not exercise discretion/independent judgment with respect to matters of significance (third element not met); administrative exemption does not apply
Whether Zannikos is exempt as a "highly compensated employee" (29 C.F.R. §541.601)	Plaintiffs: Zannikos’s primary duties were not office/non-manual work related to management operations, so the HCE exemption shouldn't apply despite pay	Oil Inspections: Zannikos earned >$100,000 and his duties were non-manual and management-related, so the HCE exemption applies	Held: Zannikos earned $100,000.08 in 2011 and his primary duties were non-manual and related to management of customers, so the HCE exemption applies beginning Jan. 2011
Whether the FLSA three-year (willful) or two-year (non-willful) statute of limitations applies (29 U.S.C. §255)	Plaintiffs: Oil Inspections recklessly disregarded FLSA applicability (failed to research, consult lawyers/DOL, knew FLSA might apply), so violations were willful	Oil Inspections: any error was non-willful/negligent; lack of research/advice insufficient for willfulness	Held: Plaintiffs failed to show knowledge or reckless disregard; employer’s conduct was not willful; two-year statute of limitations applies

Key Cases Cited

Sossamon v. Lone Star State of Tex., 560 F.3d 316 (5th Cir.) (summary-judgment standard)
Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709 (Sup. Ct.) (distinguishing questions of law and fact in FLSA exemptions)
Cowart v. Ingalls Shipbuilding, Inc., 213 F.3d 261 (5th Cir.) (analysis of discretion/independent judgment)
Lott v. Howard Wilson Chrysler-Plymouth, Inc., 203 F.3d 326 (5th Cir.) (employee need not have final decisionmaking authority for exemption)
Cheatham v. Allstate Ins. Co., 465 F.3d 578 (5th Cir.) (discretion can exist despite consulting manuals; contrast with inspectors)
McLaughlin v. Richard Shoe Co., 486 U.S. 128 (Sup. Ct.) (standard for willfulness under FLSA)
Dalheim v. KDFW-TV, 918 F.2d 1220 (5th Cir.) (financial significance alone insufficient to show discretion)
Ikossi-Anastasiou v. Bd. of Supervisors of La. State Univ., 579 F.3d 546 (5th Cir.) (willfulness standard discussion)