Reward Work Act

Summary#

This bill, the Reward Work Act, would stop public companies from buying their own shares on national stock exchanges. It would cancel the federal rule known as 17 C.F.R. § 240.10b-18 that guides open-market buybacks. The bill does not change rules for tender offers (private offers to buy shares).

The bill also would require that companies register securities on a national exchange only if at least one-third of their board directors are chosen by the company’s employees. Employee directors must be elected in a one-employee-one-vote process. The Securities and Exchange Commission (SEC), working with the National Labor Relations Board (NLRB), must make rules to ensure these director elections are fair and that companies meet the one-third employee-director requirement within two years of the law taking effect. The SEC must issue regulations directing exchanges and issuers to follow the law.

Definitions in the bill reference existing securities and labor laws. The bill says the terms equity security, exchange, issuer, and director have the meanings given in the Securities Exchange Act of 1934. The term employee follows the National Labor Relations Act and includes workers covered by the Railway Labor Act.

What it means for you#

  • If you work for a public company, you would have the right to vote in an employee election for board members. At least one out of every three seats on the board must be filled by employee-elected directors for companies listed on a national exchange.
  • If you own shares of a company traded on a national exchange, the company could no longer buy those shares back on the exchange market under the rules the bill would set.
  • If you follow or regulate public markets, the SEC would issue new rules and work with the NLRB to set up election procedures and enforcement.

Expenses#

No publicly available information on federal costs, budget effects, or estimated economic impacts is included in the bill text or provided metadata.

Proponents' View#

No publicly available information on proponents’ stated reasons or arguments is included in the bill text or provided metadata.

Opponents' View#

No publicly available information on opponents’ stated reasons or arguments is included in the bill text or provided metadata.