Reward Work Act

II 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. MAR- KEY, 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Reward Work Act’’. 4 SEC. 2. PROHIBITION ON STOCK BUYBACKS ON THE OPEN 5 MARKET. 6 (a) DEFINITIONS.—In this section— 7 (1) the term ‘‘covered issuer’’ means an issuer 8 that— 9 VerDate Sep 11 2014 00:21 Apr 04, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3540.IS S3540 2 •S 3540 IS (A) receives financial assistance relating to 1 the coronavirus disease 2019 (COVID–19) pan- 2 demic; and 3 (B) has repurchased more than 4 $1,000,000,000 of the securities of the issuer 5 on the open market over the during the pre- 6 vious 5-year period; 7 (2) the terms ‘‘equity security’’, ‘‘exchange’’, 8 and ‘‘issuer’’ have the meanings given the terms in 9 section 3 of the Securities Exchange Act of 1934 10 (15 U.S.C. 78c); and 11 (3) the term ‘‘national securities exchange’’ 12 means an exchange registered under section 6 of the 13 Securities Exchange Act of 1934 (15 U.S.C. 78f). 14 (b) PROHIBITIONS.—Notwithstanding any other pro- 15 vision of law, no covered issuer may purchase an equity 16 security of the covered issuer on a national securities ex- 17 change. 18 (c) NO FORCE OR EFFECT.—Section 240.10b–18 of 19 title 17, Code of Federal Regulations, shall have no force 20 or effect. 21 (d) RULE OF CONSTRUCTION.—Nothing in this sec- 22 tion may be construed to affect tender offers subject to 23 section 240.13e–4 and sections 240.14e–1 through 24 240.14f–1 of title 17, Code of Federal Regulations. 25 VerDate Sep 11 2014 00:21 Apr 04, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3540.IS S3540 3 •S 3540 IS SEC. 3. WORKER REPRESENTATION ON CORPORATE BOARD 1 OF DIRECTORS. 2 (a) DEFINITIONS.—In this section— 3 (1) the term ‘‘covered issuer’’ has the meaning 4 given the term in section 2(a); 5 (2) the term ‘‘director’’ has the meaning given 6 the term in section 3 of the Securities Exchange Act 7 of 1934 (15 U.S.C. 78c); and 8 (3) the term ‘‘employee’’— 9 (A) has the meaning given the term in sec- 10 tion 2 of the National Labor Relations Act (29 11 U.S.C. 152); 12 (B) includes any individual employed by an 13 employer subject to the Railway Labor Act (45 14 U.S.C. 151 et seq.). 15 (b) REGISTRATION REQUIREMENTS FOR SECURI- 16 TIES.—Section 12(b) of the Securities Exchange Act of 17 1934 (15 U.S.C. 78l(b)(1)) is amended by adding at the 18 end the following: 19 ‘‘(4)(A) In this paragraph, the term ‘covered 20 issuer’ means an issuer that— 21 ‘‘(i) receives financial assistance relating to 22 the coronavirus disease 2019 (COVID–19) pan- 23 demic; and 24 ‘‘(ii) has repurchased more than 25 $1,000,000,000 of the securities of the issuer 26 VerDate Sep 11 2014 00:21 Apr 04, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3540.IS S3540 4 •S 3540 IS on the open market over the during the pre- 1 vious 5-year period. 2 ‘‘(B) No covered issuer may register securities 3 on a national exchange unless at least 1⁄3 of the cov- 4 ered issuer’s directors are chosen by the covered 5 issuer’s employees in a one-employee-one-vote elec- 6 tion process.’’. 7 (c) POLICY.—The Securities and Exchange Commis- 8 sion, in consultation with the National Labor Relations 9 Board, shall promulgate regulations— 10 (1) to ensure that elections of directors of cov- 11 ered issuers are fair and democratic; and 12 (2) to ensure that 1⁄3 of a covered issuer’s 13 board of directors will be composed of employee rep- 14 resentatives within 2 years of the date of enactment 15 of this Act. 16 SEC. 4. REGULATIONS. 17 The Securities and Exchange Commission shall pro- 18 mulgate regulations to direct national securities exchanges 19 and covered issuers, as defined in section 2(a), to comply 20 with this Act and the amendments made by this Act. 21 Æ VerDate Sep 11 2014 00:21 Apr 04, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S3540.IS S3540