Heckle v. Matrix Absence Management, Inc.

Background

Erica Heckle brought a proposed class action against Matrix Absence Management, Inc. She alleged that Matrix misclassified her and other Telephonic Claims Examiners (TCEs) as exempt from overtime requirements under the New York Labor Law and failed to provide proper wage statements under New York Labor Law Section 196. Heckle also asserted an individual claim under the Fair Labor Standards Act based on her alleged misclassification as overtime-exempt.

Matrix is a third-party administrator that processes short-term disability and leave-of-absence claims for companies. TCEs review claims, apply customer insurance-plan terms and Matrix procedures, decide whether claims should be approved, denied, or referred for review, and communicate with claimants. Matrix classified all TCEs as exempt administrative employees, paid them salaries, did not track whether they worked more than 40 hours per week, and issued wage statements showing 80 hours for each two-week pay period regardless of actual hours worked.

Heckle worked as a TCE in Matrix’s Hawthorne, New York, office from November 2010 through November 2020. She sought certification of a class consisting of all current and former TCEs employed by Matrix from February 18, 2015, through the final date of judgment in the Hawthorne office, including employees who worked remotely while reporting to that office.

Class-certification standard

The court applied Federal Rule of Civil Procedure 23. Under Rule 23(a), a proposed class must satisfy numerosity, commonality, typicality, and adequacy. The Second Circuit also requires that class members be ascertainable, meaning they can be identified through an objective method. The proposed class must also satisfy at least one part of Rule 23(b). Heckle relied on Rule 23(b)(3), which requires common issues to predominate over individual issues and a class action to be superior to other ways of resolving the dispute.

The court noted that class certification requires a careful analysis and that some inquiries may overlap with the merits. But the court considered merits-related facts only as relevant to deciding whether the Rule 23 requirements were met, not to determine whether Matrix actually violated the law.

Rule 23(a) requirements

Numerosity. A Matrix representative testified that approximately 150 TCEs reported to the Hawthorne office. Because that number was sufficient and Matrix did not contest numerosity, the court found this requirement satisfied.

Commonality. The court identified common questions about whether Matrix required or allowed TCEs to work more than 40 hours, what their primary duties were, whether Matrix provided proper wage statements, and whether their duties were directly related to management policies or general business operations for purposes of the administrative exemption. The court found that these questions could produce common answers for the class.

Typicality. Heckle and the proposed class members challenged the same policy: Matrix’s classification of all TCEs as exempt administrative employees. The court found that they would make similar arguments that claims reviewing was not exempt work and did not involve the required level of discretion and independent judgment. Differences in proficiency levels, assigned customers, claim types, supervisor-review thresholds, mentoring, and overtime hours did not defeat typicality because the employees shared the same general claims-examiner role, reported to the same office, were paid salaries, and were subject to the same overtime policy.

Adequacy. The court found that Heckle had the same interests and alleged injury as the proposed class members, had assisted in investigating the case, provided documents to her attorneys, and participated in a deposition. The record did not show conflicts between her interests and those of the class. The court also found that her attorneys were qualified, experienced in class actions and wage-and-hour litigation, and able to represent the class.

Ascertainability. The court found that the proposed class could be identified using Matrix’s employment records because it was defined by the TCE position, reporting office, and a specific time period.

Rule 23(b)(3) requirements

Predominance. Matrix argued that individual differences among TCEs—including claim volume, supervisors, review thresholds, assigned clients, claim types, consultations with nurse case managers, mentoring, and special projects—made individual issues more important than common ones. The court disagreed. It found evidence that TCEs had materially similar duties and were governed by common materials, including Matrix’s Best Practices, standard operating procedures, job postings, claim-processing templates, and testimony from Heckle and Matrix representatives.

The court also considered Matrix’s blanket policy of treating all TCEs as exempt, regardless of claim type or proficiency level, as evidence that the employees shared sufficient characteristics for common questions to predominate. The court concluded that differences in how individual TCEs performed their jobs were not shown to be large enough to make individual issues predominant. It emphasized that the central question would be whether the TCEs’ main activity—examining claims—was exempt.

Superiority. The court found that a class action was superior to individual lawsuits. It reasoned that individual litigation could be impractical for employees with relatively small wage claims. The court also found little risk of duplicative or overlapping outcomes from a separate misclassification case in Arizona because the proposed class was limited to TCEs reporting to the Hawthorne office and asserted New York claims. The court found New York to be a desirable forum and anticipated no significant management problems because the class was modest in size and readily identifiable.

Appointment of class counsel

Under Rule 23(g), the court considered the work counsel had already performed, their experience with class actions and wage-and-hour cases, their knowledge of the applicable law, and the resources they would commit. The court found that Heckle’s attorneys had investigated and prosecuted the claims, participated in mediation and depositions, litigated the certification motion, and had substantial relevant experience. The court therefore appointed plaintiff’s attorneys as class counsel.

Disposition

Judge Vincent L. Briccetti granted Heckle’s motion for class certification on her New York Labor Law claims and appointment of class counsel. The court directed the attorneys to appear for a status conference and submit case-management materials and a proposed class notice. The opinion did not decide the ultimate merits of the wage claims or the individual Fair Labor Standards Act claim.