Reward Work Act

To prohibit public companies from repurchasing their shares on the open market, and for other purposes. 1. Short title This Act may be cited as the Reward Work Act 2. Prohibition on stock buybacks on the open market (a) Definitions In this section— (1) the term covered issuer (A) receives financial assistance relating to the coronavirus disease 2019 (COVID–19) pandemic; and (B) has repurchased more than $1,000,000,000 of the securities of the issuer on the open market over the during the previous 5-year period; (2) the terms equity security exchange issuer 15 U.S.C. 78c (3) the term national securities exchange 15 U.S.C. 78f (b) Prohibitions Notwithstanding any other provision of law, no covered issuer may purchase an equity security of the covered issuer on a national securities exchange. (c) No force or effect Section 240.10b–18 of title 17, Code of Federal Regulations, shall have no force or effect. (d) Rule of construction Nothing in this section may be construed to affect tender offers subject to section 240.13e–4 and sections 240.14e–1 through 240.14f–1 of title 17, Code of Federal Regulations. 3. Worker representation on corporate board of directors (a) Definitions In this section— (1) the term covered issuer (2) the term director 15 U.S.C. 78c (3) the term employee (A) has the meaning given the term in section 2 of the National Labor Relations Act ( 29 U.S.C. 152 (B) includes any individual employed by an employer subject to the Railway Labor Act ( 45 U.S.C. 151 (b) Registration requirements for securities Section 12(b) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78l(b)(1) (4) (A) In this paragraph, the term covered issuer (i) receives financial assistance relating to the coronavirus disease 2019 (COVID–19) pandemic; and (ii) has repurchased more than $1,000,000,000 of the securities of the issuer on the open market over the during the previous 5-year period. (B) No covered issuer may register securities on a national exchange unless at least 1/3 . (c) Policy The Securities and Exchange Commission, in consultation with the National Labor Relations Board, shall promulgate regulations— (1) to ensure that elections of directors of covered issuers are fair and democratic; and (2) to ensure that 1/3 4. Regulations The Securities and Exchange Commission shall promulgate regulations to direct national securities exchanges and covered issuers, as defined in section 2(a), to comply with this Act and the amendments made by this Act.

Summary: Reward Work Act This bill revises provisions related to stock buybacks. An issuer of securities may not purchase its own securities on a national exchange if the issuer has (1) received specified financial assistance related to the COVID-19 (i.e., coronavirus disease 2019) pandemic, and (2) repurchased more than $1 billion worth of its own securities in the last five years. Additionally, one-third of such issuer's board of directors must be elected by employees for the issuer to be allowed to register securities. The bill also repeals the Securities and Exchange Commission regulation (Rule 10b-18) that generally provides a safe harbor from market manipulation liability for an issuer engaging in a stock buyback.