Title: Reward Work Act
Policy area: Finance and Financial Sector

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.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3540 Introduced in Senate (IS)]

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116th CONGRESS
  2d Session
                                S. 3540

To prohibit public companies from repurchasing their shares on the open 
                    market, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 19, 2020

Mr. Schumer (for Ms. Baldwin (for herself, Mr. Blumenthal, Mr. Markey, 
 and Mr. Sanders)) introduced the following bill; which was read twice 
  and referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To prohibit public companies from repurchasing their shares on the open 
                    market, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Reward Work Act''.

SEC. 2. PROHIBITION ON STOCK BUYBACKS ON THE OPEN MARKET.

    (a) Definitions.--In this section--
            (1) the term ``covered issuer'' means an issuer that--
                    (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'', and 
        ``issuer'' have the meanings given the terms in section 3 of 
        the Securities Exchange Act of 1934 (15 U.S.C. 78c); and
            (3) the term ``national securities exchange'' means an 
        exchange registered under section 6 of the Securities Exchange 
        Act of 1934 (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.

SEC. 3. WORKER REPRESENTATION ON CORPORATE BOARD OF DIRECTORS.

    (a) Definitions.--In this section--
            (1) the term ``covered issuer'' has the meaning given the 
        term in section 2(a);
            (2) the term ``director'' has the meaning given the term in 
        section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 
        78c); and
            (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 et 
                seq.).
    (b) Registration Requirements for Securities.--Section 12(b) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78l(b)(1)) is amended by 
adding at the end the following:
            ``(4)(A) In this paragraph, the term `covered issuer' means 
        an issuer that--
                    ``(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\ of the covered issuer's 
        directors are chosen by the covered issuer's employees in a 
        one-employee-one-vote election process.''.
    (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\ of a covered issuer's board of 
        directors will be composed of employee representatives within 2 
        years of the date of enactment of this Act.

SEC. 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.
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