Amended in Senate April 1, 2013

Senate Bill No. 655

Introduced by Senator Wright

February 22, 2013

An act begin insert to amend Sections 12940 and 12965 of the Government Code, end insert relating to begin delete medical fraud end delete begin insert employment end insert .

LEGISLATIVE COUNSEL’S DIGEST

SB 655, as amended, Wright. begin delete Medical fraud. end delete begin insert Fair Employment and Housing Act: unlawful practices. end insert

begin insert

Existing law, the California Fair Employment and Housing Act, protects and safeguards the right and opportunity of all persons to seek, obtain, and hold employment without discrimination or abridgment on account of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, or sexual orientation. Existing law authorizes a person claiming to be aggrieved by an alleged unlawful practice under these provisions to file a complaint with the Department of Fair Employment and Housing and authorizes the department to bring a civil action on the behalf of the person in the case of a failure to eliminate an unlawful practice under these provisions.

end insert begin insert

This bill would provide, in a claim of an unlawful practice under these provisions, that even if an employer proves as an affirmative defense that it would have taken the same adverse action against an employee based on lawful reasons, a claim of unfair practice may still be established if the plaintiff can prove that an unlawful motive on the part of the employer was a substantial factor, as defined, in the conduct that caused harm to the employee. The bill would also provide for injunctive relief, recovery of a prevailing plaintiff’s noneconomic damages, a specified civil penalty to be paid by the employer to the plaintiff, and for attorney’s and expert’s fees against an employer who violates these provisions.

end insert begin delete

Existing law prohibits medical fraud.

end delete begin delete

This bill would state the intent of the Legislature to provide additional investigative tools and other appropriate changes in the law to enhance the prosecution of medical fraud.

end delete

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1 end insert begin insert . end insert   

end insert

begin insert Section 12940 of the end insert begin insert Government Code end insert begin insert is
amended to read: end insert

12940.  

It is an unlawful employment practice, unless based
upon a bona fide occupational qualification, or, except where based
upon applicable security regulations established by the United
States or the State of California:

(a) For an employer, because of the race, religious creed, color,
national origin, ancestry, physical disability, mental disability,
medical condition, genetic information, marital status, sex, gender,
gender identity, gender expression, age, or sexual orientation of
any person, to refuse to hire or employ the person or to refuse to
select the person for a training program leading to employment,
or to bar or to discharge the person from employment or from a
training program leading to employment, or to discriminate against
the person in compensation or in terms, conditions, or privileges
of employment.

(1) This part does not prohibit an employer from refusing to
hire or discharging an employee with a physical or mental
disability, or subject an employer to any legal liability resulting
from the refusal to employ or the discharge of an employee with
a physical or mental disability, where the employee, because of
his or her physical or mental disability, is unable to perform his
or her essential duties even with reasonable accommodations, or
cannot perform those duties in a manner that would not endanger
his or her health or safety or the health or safety of others even
with reasonable accommodations.

(2) This part does not prohibit an employer from refusing to
hire or discharging an employee who, because of the employee’s
medical condition, is unable to perform his or her essential duties
even with reasonable accommodations, or cannot perform those
duties in a manner that would not endanger the employee’s health
or safety or the health or safety of others even with reasonable
accommodations. Nothing in this part shall subject an employer
to any legal liability resulting from the refusal to employ or the
discharge of an employee who, because of the employee’s medical
condition, is unable to perform his or her essential duties, or cannot
perform those duties in a manner that would not endanger the
employee’s health or safety or the health or safety of others even
with reasonable accommodations.

(3) Nothing in this part relating to discrimination on account of
marital status shall do either of the following:

(A) Affect the right of an employer to reasonably regulate, for
reasons of supervision, safety, security, or morale, the working of
spouses in the same department, division, or facility, consistent
with the rules and regulations adopted by the commission.

(B) Prohibit bona fide health plans from providing additional
or greater benefits to employees with dependents than to those
employees without or with fewer dependents.

(4) Nothing in this part relating to discrimination on account of
sex shall affect the right of an employer to use veteran status as a
factor in employee selection or to give special consideration to
Vietnam-era veterans.

(5) (A) This part does not prohibit an employer from refusing
to employ an individual because of his or her age if the law
compels or provides for that refusal. Promotions within the existing
staff, hiring or promotion on the basis of experience and training,
rehiring on the basis of seniority and prior service with the
employer, or hiring under an established recruiting program from
high schools, colleges, universities, or trade schools do not, in and
of themselves, constitute unlawful employment practices.

(B) The provisions of this part relating to discrimination on the
basis of age do not prohibit an employer from providing health
benefits or health care reimbursement plans to retired persons that
are altered, reduced, or eliminated when the person becomes
eligible for Medicare health benefits. This subparagraph applies
to all retiree health benefit plans and contractual provisions or
practices concerning retiree health benefits and health care
reimbursement plans in effect on or after January 1, 2011.

begin insert

(6) (A) For purposes of a claim of an unlawful practice under
this subdivision, if an employer proves as an affirmative defense
that it would have taken the same adverse employment action
against an employee, at the same time, for lawful reasons, absent
consideration of the protected characteristic, the employee may
still prevail on a claim of an unlawful practice if the employee can
prove that a protected characteristic was a substantial factor in
the adverse employment action.

end insert begin insert

(B) For purposes of this subdivision, “substantial factor” means
that a reasonable person would conclude that the factor
contributed to the harm. It must be more than a remote or trivial
factor but need not be the only cause of the harm to the employee.

end insert begin insert

(C) An employee who prevails in a claim under this paragraph
is limited to the remedies provided in paragraph (2) of subdivision
(b) of Section 12965.

end insert

(b) For a labor organization, because of the race, religious creed,
color, national origin, ancestry, physical disability, mental
disability, medical condition, genetic information, marital status,
sex, gender, gender identity, gender expression, age, or sexual
orientation of any person, to exclude, expel, or restrict from its
membership the person, or to provide only second-class or
segregated membership or to discriminate against any person
because of the race, religious creed, color, national origin, ancestry,
physical disability, mental disability, medical condition, genetic
information, marital status, sex, gender, gender identity, gender
expression, age, or sexual orientation of the person in the election
of officers of the labor organization or in the selection of the labor
organization’s staff or to discriminate in any way against any of
its members or against any employer or against any person
employed by an employer.

(c) For any person to discriminate against any person in the
selection or training of that person in any apprenticeship training
program or any other training program leading to employment
because of the race, religious creed, color, national origin, ancestry,
physical disability, mental disability, medical condition, genetic
information, marital status, sex, gender, gender identity, gender
expression, age, or sexual orientation of the person discriminated
against.

(d) For any employer or employment agency to print or circulate
or cause to be printed or circulated any publication, or to make
any nonjob-related inquiry of an employee or applicant, either
verbal or through use of an application form, that expresses,
directly or indirectly, any limitation, specification, or discrimination
as to race, religious creed, color, national origin, ancestry, physical
disability, mental disability, medical condition, genetic information,
marital status, sex, gender, gender identity, gender expression,
age, or sexual orientation, or any intent to make any such limitation,
specification, or discrimination. This part does not prohibit an
employer or employment agency from inquiring into the age of
an applicant, or from specifying age limitations, where the law
compels or provides for that action.

(e) (1) Except as provided in paragraph (2) or (3), for any
employer or employment agency to require any medical or
psychological examination of an applicant, to make any medical
or psychological inquiry of an applicant, to make any inquiry
whether an applicant has a mental disability or physical disability
or medical condition, or to make any inquiry regarding the nature
or severity of a physical disability, mental disability, or medical
condition.

(2) Notwithstanding paragraph (1), an employer or employment
agency may inquire into the ability of an applicant to perform
job-related functions and may respond to an applicant’s request
for reasonable accommodation.

(3) Notwithstanding paragraph (1), an employer or employment
agency may require a medical or psychological examination or
make a medical or psychological inquiry of a job applicant after
an employment offer has been made but prior to the
commencement of employment duties, provided that the
examination or inquiry is job related and consistent with business
necessity and that all entering employees in the same job
classification are subject to the same examination or inquiry.

(f) (1) Except as provided in paragraph (2), for any employer
or employment agency to require any medical or psychological
examination of an employee, to make any medical or psychological
inquiry of an employee, to make any inquiry whether an employee
has a mental disability, physical disability, or medical condition,
or to make any inquiry regarding the nature or severity of a physical
disability, mental disability, or medical condition.

(2) Notwithstanding paragraph (1), an employer or employment
agency may require any examinations or inquiries that it can show
to be job related and consistent with business necessity. An
employer or employment agency may conduct voluntary medical
examinations, including voluntary medical histories, which are
part of an employee health program available to employees at that
worksite.

(g) For any employer, labor organization, or employment agency
to harass, discharge, expel, or otherwise discriminate against any
person because the person has made a report pursuant to Section
11161.8 of the Penal Code that prohibits retaliation against hospital
employees who report suspected patient abuse by health facilities
or community care facilities.

(h) For any employer, labor organization, employment agency,
or person to discharge, expel, or otherwise discriminate against
any person because the person has opposed any practices forbidden
under this part or because the person has filed a complaint, testified,
or assisted in any proceeding under this part.

(i) For any person to aid, abet, incite, compel, or coerce the
doing of any of the acts forbidden under this part, or to attempt to
do so.

(j) (1) For an employer, labor organization, employment agency,
apprenticeship training program or any training program leading
to employment, or any other person, because of race, religious
creed, color, national origin, ancestry, physical disability, mental
disability, medical condition, genetic information, marital status,
sex, gender, gender identity, gender expression, age, or sexual
orientation, to harass an employee, an applicant, or a person
providing services pursuant to a contract. Harassment of an
employee, an applicant, or a person providing services pursuant
to a contract by an employee, other than an agent or supervisor,
shall be unlawful if the entity, or its agents or supervisors, knows
or should have known of this conduct and fails to take immediate
and appropriate corrective action. An employer may also be
responsible for the acts of nonemployees, with respect to sexual
harassment of employees, applicants, or persons providing services
pursuant to a contract in the workplace, where the employer, or
its agents or supervisors, knows or should have known of the
conduct and fails to take immediate and appropriate corrective
action. In reviewing cases involving the acts of nonemployees, the
extent of the employer’s control and any other legal responsibility
that the employer may have with respect to the conduct of those
nonemployees shall be considered. An entity shall take all
reasonable steps to prevent harassment from occurring. Loss of
tangible job benefits shall not be necessary in order to establish
harassment.

(2) The provisions of this subdivision are declaratory of existing
law, except for the new duties imposed on employers with regard
to harassment.

(3) An employee of an entity subject to this subdivision is
personally liable for any harassment prohibited by this section that
is perpetrated by the employee, regardless of whether the employer
or covered entity knows or should have known of the conduct and
fails to take immediate and appropriate corrective action.

(4) (A) For purposes of this subdivision only, “employer” means
any person regularly employing one or more persons or regularly
receiving the services of one or more persons providing services
pursuant to a contract, or any person acting as an agent of an
employer, directly or indirectly, the state, or any political or civil
subdivision of the state, and cities. The definition of “employer”
in subdivision (d) of Section 12926 applies to all provisions of this
section other than this subdivision.

(B) Notwithstanding subparagraph (A), for purposes of this
subdivision, “employer” does not include a religious association
or corporation not organized for private profit, except as provided
in Section 12926.2.

(C) For purposes of this subdivision, “harassment” because of
sex includes sexual harassment, gender harassment, and harassment
based on pregnancy, childbirth, or related medical conditions.

(5) For purposes of this subdivision, “a person providing services
pursuant to a contract” means a person who meets all of the
following criteria:

(A) The person has the right to control the performance of the
contract for services and discretion as to the manner of
performance.

(B) The person is customarily engaged in an independently
established business.

(C) The person has control over the time and place the work is
performed, supplies the tools and instruments used in the work,
and performs work that requires a particular skill not ordinarily
used in the course of the employer’s work.

(k) For an employer, labor organization, employment agency,
apprenticeship training program, or any training program leading
to employment, to fail to take all reasonable steps necessary to
prevent discrimination and harassment from occurring.

(l) (1) For an employer or other entity covered by this part to
refuse to hire or employ a person or to refuse to select a person
for a training program leading to employment or to bar or to
discharge a person from employment or from a training program
leading to employment, or to discriminate against a person in
compensation or in terms, conditions, or privileges of employment
because of a conflict between the person’s religious belief or
observance and any employment requirement, unless the employer
or other entity covered by this part demonstrates that it has explored
any available reasonable alternative means of accommodating the
religious belief or observance, including the possibilities of
excusing the person from those duties that conflict with his or her
religious belief or observance or permitting those duties to be
performed at another time or by another person, but is unable to
reasonably accommodate the religious belief or observance without
undue hardship, as defined in subdivision (t) of Section 12926, on
the conduct of the business of the employer or other entity covered
by this part. Religious belief or observance, as used in this section,
includes, but is not limited to, observance of a Sabbath or other
religious holy day or days, reasonable time necessary for travel
prior and subsequent to a religious observance, and religious dress
practice and religious grooming practice as described in subdivision
(p) of Section 12926.

(2) An accommodation of an individual’s religious dress practice
or religious grooming practice is not reasonable if the
accommodation requires segregation of the individual from other
employees or the public.

(3) An accommodation is not required under this subdivision
if it would result in a violation of this part or any other law
prohibiting discrimination or protecting civil rights, including
subdivision (b) of Section 51 of the Civil Code and Section 11135
of this code.

(m) For an employer or other entity covered by this part to fail
to make reasonable accommodation for the known physical or
mental disability of an applicant or employee. Nothing in this
subdivision or in paragraph (1) or (2) of subdivision (a) shall be
construed to require an accommodation that is demonstrated by
the employer or other covered entity to produce undue hardship,
as defined in subdivision (t) of Section 12926, to its operation.

(n) For an employer or other entity covered by this part to fail
to engage in a timely, good faith, interactive process with the
employee or applicant to determine effective reasonable
accommodations, if any, in response to a request for reasonable
accommodation by an employee or applicant with a known physical
or mental disability or known medical condition.

(o) For an employer or other entity covered by this part, to
subject, directly or indirectly, any employee, applicant, or other
person to a test for the presence of a genetic characteristic.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 12965 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

12965.  

(a) In the case of failure to eliminate an unlawful
practice under this part through conference, conciliation, mediation,
or persuasion, or in advance thereof if circumstances warrant, the
director in his or her discretion may bring a civil action in the name
of the department on behalf of the person claiming to be aggrieved.
Prior to filing a civil action, the department shall require all parties
to participate in mandatory dispute resolution in the department’s
internal dispute resolution division free of charge to the parties in
an effort to resolve the dispute without litigation. In any civil
action, the person claiming to be aggrieved shall be the real party
in interest and shall have the right to participate as a party and be
represented by his or her own counsel. The civil action shall be
brought in any county in which unlawful practices are alleged to
have been committed, in the county in which records relevant to
the alleged unlawful practices are maintained and administered,
or in the county in which the person claiming to be aggrieved
would have worked or would have had access to public
accommodation, but for the alleged unlawful practices. If the
defendant is not found in any of these counties, the action may be
brought within the county of the defendant’s residence or principal
office.

For any complaint treated by the director as a group or class
complaint for purposes of investigation, conciliation, mediation,
or civil action pursuant to Section 12961, a civil action shall be
brought, if at all, within two years after the filing of the complaint.
For any complaint alleging a violation of Section 51.7 of the Civil
Code, a civil action shall be brought, if at all, within two years
after the filing of the complaint. For all other complaints, a civil
action shall be brought, if at all, within one year after the filing of
a complaint. If the director determines, pursuant to Section 12961,
that a complaint investigated as a group or class complaint under
Section 12961 is to be treated as a group or class complaint for
purposes of conciliation, mediation, or civil action as well, that
determination shall be made and shall be communicated in writing
within one year after the filing of the complaint to each person,
employer, labor organization, employment agency, or public entity
alleged in the complaint to have committed an unlawful practice.

(b)  begin insert (1) end insert begin insert   end insert If a civil action is not brought by the department within
150 days after the filing of a complaint, or if the department earlier
determines that no civil action will be brought, the department
shall promptly notify, in writing, the person claiming to be
aggrieved that the department shall issue, on his or her request,
the right-to-sue notice. This notice shall indicate that the person
claiming to be aggrieved may bring a civil action under this part
against the person, employer, labor organization, or employment
agency named in the verified complaint within one year from the
date of that notice. If the person claiming to be aggrieved does not
request a right-to-sue notice, the department shall issue the notice
upon completion of its investigation, and not later than one year
after the filing of the complaint. A city, county, or district attorney
in a location having an enforcement unit established on or before
March 1, 1991, pursuant to a local ordinance enacted for the
purpose of prosecuting HIV/AIDS discrimination claims, acting
on behalf of any person claiming to be aggrieved due to HIV/AIDS
discrimination, may also bring a civil action under this part against
the person, employer, labor organization, or employment agency
named in the notice. The superior courts of the State of California
shall have jurisdiction of those actions, and the aggrieved person
may file in these courts. An action may be brought in any county
in the state in which the unlawful practice is alleged to have been
committed, in the county in which the records relevant to the
practice are maintained and administered, or in the county in which
the aggrieved person would have worked or would have had access
to the public accommodation but for the alleged unlawful practice,
but if the defendant is not found within any of these counties, an
action may be brought within the county of the defendant’s
residence or principal office. A copy of any complaint filed
pursuant to this part shall be served on the principal offices of the
department. The remedy for failure to send a copy of a complaint
is an order to do so. Those actions may not be filed as class actions
or may not be maintained as class actions by the person or persons
claiming to be aggrieved where those persons have filed a civil
class action in the federal courts alleging a comparable claim of
employment discrimination against the same defendant or
defendants. In civil actions brought under this section, the court,
in its discretion, may award to the prevailing party, including the
department, reasonable attorney’s fees and costs, including expert
witness fees.

begin insert

(2) If an employee establishes that an employer committed an
unlawful practice under the provisions of paragraph (6) of
subdivision (a) of Section 12940, the employer shall be liable for
an amount to be determined by a jury, or a court sitting without
a jury, for noneconomic damages resulting from the adverse
employment action and a statutory penalty of twenty-five thousand
dollars ($25,000) to be awarded directly to the employee. A court
may also grant as relief any other declaratory or injunctive relief
that, in the judgment of the court, will effectuate the purpose of
this part. This relief may include, but is not limited to, a
requirement that the employer conduct training for all employees,
supervisors, and management on the requirements of this part, the
rights and remedies of those who allege a violation of this article,
and the employer’s internal grievance procedures. The court may
award to the prevailing party, including the department, reasonable
attorney’s fees and costs, including expert witness fees.

end insert

(c) A court may grant as relief in any action filed pursuant to
subdivision (a) any relief a court is empowered to grant in a civil
action brought pursuant to subdivision (b), in addition to any other
relief that, in the judgment of the court, will effectuate the purpose
of this part. This relief may include a requirement that the employer
conduct training for all employees, supervisors, and management
on the requirements of this part, the rights and remedies of those
who allege a violation of this part, and the employer’s internal
grievance procedures. In addition, in order to vindicate the purposes
and policies of this part, a court may assess against the defendant,
if the civil complaint or amended civil complaint so prays, a civil
penalty of up to twenty-five thousand dollars ($25,000) to be
awarded to a person denied any right provided for by Section 51.7
of the Civil Code, as an unlawful practice prohibited under this
part.

(d) (1) Notwithstanding subdivision (b), the one-year statute
of limitations, commencing from the date of the right-to-sue notice
by the Department of Fair Employment and Housing, to the person
claiming to be aggrieved, shall be tolled when all of the following
requirements have been met:

(A) A charge of discrimination or harassment is timely filed
concurrently with the Equal Employment Opportunity Commission
and the Department of Fair Employment and Housing.

(B) The investigation of the charge is deferred by the
Department of Fair Employment and Housing to the Equal
Employment Opportunity Commission.

(C) A right-to-sue notice is issued to the person claiming to be
aggrieved upon deferral of the charge by the Department of Fair
Employment and Housing to the Equal Employment Opportunity
Commission.

(2) The time for commencing an action for which the statute of
limitations is tolled under paragraph (1) expires when the federal
right-to-sue period to commence a civil action expires, or one year
from the date of the right-to-sue notice by the Department of Fair
Employment and Housing, whichever is later.

(3) This subdivision is intended to codify the holding in Downs
v. Department of Water and Power of City of Los Angeles (1997)
58 Cal.App.4th 1093.

(e) (1) Notwithstanding subdivision (b), the one-year statute
of limitations, commencing from the date of the right-to-sue notice
by the Department of Fair Employment and Housing, to the person
claiming to be aggrieved, shall be tolled when all of the following
requirements have been met:

(A) A charge of discrimination or harassment is timely filed
concurrently with the Equal Employment Opportunity Commission
and the Department of Fair Employment and Housing.

(B) The investigation of the charge is deferred by the Equal
Employment Opportunity Commission to the Department of Fair
Employment and Housing.

(C) After investigation and determination by the Department
of Fair Employment and Housing, the Equal Employment
Opportunity Commission agrees to perform a substantial weight
review of the determination of the department or conducts its own
investigation of the claim filed by the aggrieved person.

(2) The time for commencing an action for which the statute of
limitations is tolled under paragraph (1) shall expire when the
federal right-to-sue period to commence a civil action expires, or
one year from the date of the right-to-sue notice by the Department
of Fair Employment and Housing, whichever is later.

begin delete

SECTION 1.  

The Legislature finds and declares the following:

(a) Medical programs cost the state approximately
$40,000,000,000 in General Fund moneys, which amounts to
approximately one quarter of the total state budget revenue. These
programs provides health coverage for one in six Californians.

(b) State revenue resources are limited and additional state funds
may be required to implement the mandates of the federal Patient
Protection and Affordable Care Act (42 U.S.C. Sec. 18051).

(c) Medical fraud represents a significant drain and loss of
General Fund moneys that could otherwise be used to expand
coverage or provide better reimbursement rates for doctors.

(d) It is the intent of the Legislature to provide additional
investigative tools and other appropriate changes in the law to
enhance the prosecution of medical fraud and reduce the enormous
related drain on the General Fund revenue.

end delete