BILL NUMBER: SB 655	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 1, 2013

INTRODUCED BY   Senator Wright

                        FEBRUARY 22, 2013

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



	LEGISLATIVE COUNSEL'S DIGEST


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

   Existing law prohibits medical fraud.  
   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. 
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1   .    Section   12940 of
the   Government Code   is amended to read: 
   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. 
   (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.  
   (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.  
   (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. 
   (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.
   SEC. 2.    Section 12965 of the   Government
Code   is amended to read: 
   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)  (1)    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. 
   (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. 
   (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. 
                                                 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.