Stock Buyback Reform and Worker Dividend Act of 2019
This bill revises requirements related to stock buybacks (i.e., a company repurchasing shares of common stock). Specifically, issuers of securities must provide an annual dividend to non-executive employees in certain circumstances. The calculation of this dividend is based on (1) the amount the issuer spends on stock buybacks, (2) increases in dividends, and (3) any special dividends.
Additionally, an issuer is prohibited from repurchasing shares unless details of the buyback are disclosed to the Securities and Exchange Commission (SEC), including the rationale for the repurchase. The buyback must also comply with certain purchasing requirements. The bill lowers the allowed daily amount of repurchased shares. Executive officers may not sell shares for seven days beginning on the date of an announced buyback, subject to certain exceptions.
The SEC may enforce these provisions. Employees are afforded a private right of action against an issuer regarding required employee dividends.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2391 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
1st Session
S. 2391
To amend the Securities Exchange Act of 1934 to impose requirements
relating to the purchase of certain equity securities by issuers, and
for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 31, 2019
Mr. Brown introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Securities Exchange Act of 1934 to impose requirements
relating to the purchase of certain equity securities by issuers, 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 ``Stock Buyback Reform and Worker
Dividend Act of 2019''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Over the last several decades--
(A) the volume and value of stock buybacks have
increased significantly, with particularly large
increases occurring in the 15 years preceding the date
of enactment of this Act; and
(B) the wealth gap in the United States has widened
drastically, as corporate profits and executive
compensation have skyrocketed, but, for workers,
salaries and wages have barely increased and purchasing
power has remained the same.
(2) Between 2004 and 2013, some of the largest companies in
the United States spent at least 100 percent of their net
income on stock buybacks and, between 2010 and 2017, companies
in the United States spent more than $3,000,000,000,000 on
those buybacks. After the enactment of changes to the tax laws
of the United States in December 2017, companies in the United
States further increased stock buyback activity.
(3) In 2018--
(A) companies listed in the S&P 500 index spent
$806,400,000,000 purchasing their own stock, an amount
that is 55 percent higher than in 2017 and 36 percent
higher than in 2007, the year that--
(i) had previously held the record for the
largest total buyback amount; and
(ii) marked the beginning of the most
significant financial crisis since the Great
Depression; and
(B) companies spent more money on stock buybacks
than on debt payments, capital expenditures, research
and development, or dividends.
(4) Stock buybacks benefit large shareholders and corporate
executives, the pay packages of whom include significant stock
compensation. Those buybacks can also increase the earnings per
share for a company and nearly \1/2\ of the companies listed in
the S&P 500 index link executive compensation to earnings per
share.
(5) Compared to the typical worker, the compensation for a
chief executive officer (referred to in this paragraph as a
``CEO'') has increased significantly. In 1989, the ratio of
CEO-to-worker compensation was 58 to 1, but, in 2017, that
ratio was 312 to 1. Over roughly the same period of time, the
wealth gap in the United States has widened considerably.
Between 1989 and 2016, the share of wealth in the United States
held by the top 1 percent of individuals in the United States
with respect to annual income increased from just below 30
percent to nearly 39 percent, while the share of wealth held by
the bottom 90 percent of individuals in the United States with
respect to annual income dropped from slightly more than 33
percent to less than 23 percent.
(6) Since 2000, corporate profits, as a percentage of total
income in the United States, have increased by nearly 5
percentage points while workers' salaries, as a percentage of
that total income, have decreased by 4 percentage points.
(7) The economic strength of the United States is
undermined by the wealth gap described in this section.
According to the Organisation for Economic Co-operation and
Development, increasing income inequality in the United States
between 1990 and 2010 reduced the per capita gross domestic
product of the United States by approximately 5 percentage
points.
(8) Left unaddressed, the patterns of corporate excess and
growing wealth inequality described in this section will worsen
and workers will continue to contribute to corporate profits
without sharing in those profits.
SEC. 3. REPURCHASE OF COMMON STOCK.
(a) Repeal of Safe Harbor.--Section 240.10b-18 of title 17, Code of
Federal Regulations, shall have no force or effect.
(b) Disclosure and Other Requirements.--The Securities Exchange Act
of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 9
(15 U.S.C. 78i) the following:
``SEC. 9A. ISSUER COMMON STOCK REPURCHASES.
``(a) Definitions.--
``(1) In general.--Except as provided in paragraph (2), in
this section, the definitions of terms in section 240.10b-18(a)
of title 17, Code of Federal Regulations, as in effect on the
day before the date of enactment of this section, shall apply
to any such term that appears in this section.
``(2) Covered purchase.--The term `covered purchase'--
``(A) means a purchase (or any bid or limit order
that would effect such purchase) of the common stock of
an issuer (or an equivalent interest, including a unit
of beneficial interest in a trust or limited
partnership or a depository share) by or for the issuer
or any affiliated purchaser (including riskless
principal transactions);
``(B) includes a purchase described in subparagraph
(A) that is effected during a transaction described in
subparagraph (C)(iv) in which the consideration is
solely cash and there is no valuation period; and
``(C) does not include a purchase described in
subparagraph (A) that is effected--
``(i) during the applicable restricted
period of a distribution that is subject to
section 242.102 of title 17, Code of Federal
Regulations, or any successor regulation;
``(ii) by or for an issuer plan by an agent
independent of the issuer;
``(iii) as a fractional share purchase (a
fractional interest in a security) evidenced by
a script certificate, order form, or similar
document;
``(iv) during the period from the time of
public announcement, as defined in section
230.165(f) of title 17, Code of Federal
Regulations, or any successor regulation, of a
merger, acquisition, or similar transaction
involving a recapitalization, until the earlier
of the completion of that transaction or the
completion of the vote by target shareholders;
``(v) pursuant to section 240.13e-1 of
title 17, Code of Federal Regulations, or any
successor regulation;
``(vi) pursuant to a tender offer that is
subject to or specifically excepted from
section 240.13e-4 of title 17, Code of
Regulations, or any successor regulation; or
``(vii) pursuant to a tender offer that is
subject to section 14(d), and any rules or
regulations prescribed by the Commission
relating to that section.
``(b) Requirement.--
``(1) In general.--Except as provided in paragraph (2), it
shall be unlawful as a fraudulent, deceptive, or manipulative
act or practice under section 9(a)(2) or 10(b) of this Act or
section 240.10b-5 of title 17, Code of Federal Regulations, or
any successor regulation, for an issuer or affiliated purchaser
of the issuer to effect a repurchase of the common stock of the
issuer unless the issuer or affiliated purchaser, as
applicable, complies with the requirements under this section.
``(2) Exceptions.--Paragraph (1) shall not apply--
``(A) to an issuer or affiliated purchaser of an
issuer if--
``(i) a violation of the requirements under
this section occurred solely by reason of the
conduct of a broker, dealer, or other person
acting for the issuer or affiliated purchaser;
``(ii) the issuer or affiliated purchaser
did not know or have reason to know that the
broker, dealer, or other person was engaging or
would engage in that conduct; and
``(iii) the issuer or affiliated purchaser
had taken reasonable steps to ensure that the
broker, dealer, or other person would comply
with the requirements under this section; or
``(B) to a broker, dealer, or other person acting
for an issuer or affiliated purchaser of the issuer
if--
``(i) a violation of the requirements under
this section occurred solely by reason of the
conduct of the issuer or affiliated purchaser;
and
``(ii) the broker, dealer, or other person
did not know or have reason to know that the
issuer or affiliated purchaser was engaging or
would engage in conduct that would violate the
requirements under this section.
``(c) Disclosure.--
``(1) In general.--Any issuer or affiliated purchaser of
the issuer that seeks to effect a plan or program to repurchase
common stock of the issuer shall, on or before the date on
which the issuer or affiliated purchaser begins repurchasing
common stock under the plan or program, disclose to the
Commission on a Form 8-K a filing that includes--
``(A) the economic rationale, long-term benefits,
and reason for the repurchase;
``(B) the minimum and maximum number (if any) of
shares of common stock to be repurchased, and the
dollar value to be spent, under the plan or program;
``(C) the manner and method of repurchase,
including any price guidelines or limitations, or
contractual plan or arrangement;
``(D) the intended disposition or treatment of the
repurchased common stock;
``(E) whether any executive officer of the issuer
or affiliated purchaser is purchasing common stock
during the pendency of the repurchase;
``(F) whether any executive officer of the issuer
or affiliated purchaser is permitted, or intends, to
sell common stock during the pendency of the
repurchase;
``(G) a summary of any communications between the
issuer and any holders of common stock of the issuer
regarding the scope and implementation of the plan or
program; and
``(H) the source of funds for the repurchase,
specifying if any debt will be incurred by the issuer
or affiliated purchaser.
``(2) Weekly disclosure.--
``(A) In general.--In addition to the requirement
under paragraph (1), each issuer that effects a
repurchase of common stock of the issuer in any
calendar week shall, not later than the last business
day of the following week, file with the Commission a
public disclosure filing (in such form and manner as
the Commission shall, by rule, establish) that
identifies--
``(i) the number of shares of common stock
of the issuer that the issuer repurchased;
``(ii) the average price paid per share
during the week covered by the filing; and
``(iii) the identity of any broker-dealer
that effected the purchase during the week
covered by the filing.
``(B) No repurchase.--An issuer shall not be
required to submit a filing under subparagraph (A) with
respect to any calendar week in which the issuer does
not repurchase the common stock of the issuer.
``(3) Definition.--In this subsection, the term `executive
officer' has the meaning given the term in section 240.3b-7 of
title 17, Code of Federal Regulations, as in effect on the day
before the date of enactment of this section.
``(d) Purchasing Requirements.--
``(1) One broker or dealer.--
``(A) In general.--Except as provided in
subparagraph (B) and paragraph (2)(B)(ii), a covered
purchase shall be effected from or through only 1
broker or dealer on any single day.
``(B) Exception.--Subparagraph (A) shall not apply
to a covered purchase that is not solicited by or on
behalf of an issuer or an affiliated purchaser of the
issuer.
``(C) Same broker or dealer.--If a covered purchase
is effected by or on behalf of not less than 1
affiliated purchaser of an issuer (or the issuer and
not less than 1 of the affiliated purchasers of the
issuer) on a single day, the issuer and all affiliated
purchasers shall use the same broker or dealer.
``(D) Limited access to liquidity.--If a covered
purchase is effected on behalf of an issuer by a
broker-dealer that is not an electronic communication
network or other alternative trading system, that
broker-dealer can access electronic communication
network or other alternative trading system liquidity
in order to execute a repurchase of common stock on
behalf of the issuer or any affiliated purchaser of the
issuer on that day.
``(2) Time of purchases.--
``(A) In general.--A covered purchase effected by
an issuer or an affiliated purchaser of an issuer shall
not be--
``(i) the opening (regular way) purchase
reported in the consolidated system;
``(ii) except as provided in subparagraph
(B), effected during the 10 minutes before the
scheduled close of the primary trading session
in the principal market for the security, and
the 10 minutes before the scheduled close of
the primary trading session in the market where
the purchase is effected, for a security that
has an average daily trading volume reported
for that security during the 4 calendar weeks
preceding the week in which the purchase is to
be effected of not less than $1,000,000 and a
public float value of not less than
$150,000,000; or
``(iii) effected during the 30 minutes
before the scheduled close of the primary
trading session in the principal market for the
security, and the 30 minutes before the
scheduled close of the primary trading session
in the market where the purchase is effected,
for all other securities.
``(B) Purchase following close of primary trading
session.--
``(i) In general.--A covered purchase may
be effected following the close of the primary
trading session until the termination of the
period in which last sale prices are reported
in the consolidated system if--
``(I) the covered purchase is
effected at a price that does not
exceed the lower of--
``(aa) the closing price of
the primary trading session in
the principal market for the
security; or
``(bb) any lower bids or
sale prices subsequently
reported in the consolidated
system; and
``(II) all other applicable
requirements under this section are
met.
``(ii) Different brokers and dealers.--An
issuer or an affiliated purchaser of an issuer
may use 1 broker or dealer to effect a covered
purchase during the period described in clause
(i) that is different from the broker or dealer
that the issuer or affiliated purchaser used
during the primary trading session.
``(iii) Limitation.--A covered purchase
effected during the period described in clause
(i) may be not be the opening transaction of
the session following the close of the primary
trading session.
``(3) Price of purchases.--Any covered purchase shall be
effected at a purchase price that--
``(A) does not exceed the highest independent bid
or the last independent transaction price, whichever is
higher, quoted or reported in the consolidated system
at the time the covered purchase is effected;
``(B) for securities for which bids and transaction
prices are not quoted or reported in the consolidated
system, does not exceed the highest independent bid or
the last independent transaction price, whichever is
higher, displayed and disseminated on any national
securities exchange or on any interdealer quotation
system, as defined in section 240.15c2-11 of title 17,
Code of Federal Regulations (or any successor
regulation), that displays not less than 2 priced
quotations for the security, at the time the covered
purchase is effected; and
``(C) for any other security not described in
subparagraph (B), is not higher than the highest
independent bid obtained from 3 independent dealers.
``(4) Volume of purchases.--The total volume of covered
purchases effected by or for an issuer and any affiliated
purchaser of the issuer on any single day shall not exceed 15
percent of the average daily trading volume reported for that
security during the 4 calendar weeks preceding the week in
which the covered purchase is to be effected.
``(5) Alternative conditions.--The conditions of paragraphs
(1) through (4) shall apply in connection with a covered
purchase effected during a trading session following the
imposition of a market-wide trading suspension, except that--
``(A) the time of covered purchases condition under
paragraph (2) shall not apply either--
``(i) from the reopening of trading until
the scheduled close of trading on the date on
which that suspension is imposed; or
``(ii) at the opening of trading on the
next trading day until the scheduled close of
trading that day, if a market-wide trading
suspension was in effect at the close of
trading on the preceding day; and
``(B) the volume of covered purchases condition
under paragraph (4) shall be modified so that the
amount of covered purchases may not exceed 100 percent
of the average daily trading volume for that security.
``(e) Prohibition on Sales by Executive Officers.--
``(1) In general.--Except as provided in paragraph (2),
upon the announcement by an issuer of the initiation,
continuation, or increase in size of a repurchase plan for the
common stock of the issuer, an executive officer of the issuer
may not sell shares of the common stock of the issuer during
the 7-day period beginning on the date of the announcement.
``(2) Exception.--An executive officer of an issuer may
sell shares of the common stock of the issuer during the 7-day
period described in paragraph (1) if the sale of the shares
involves a sale of common stock that satisfies the conditions
under section 240.10b5-1(c) of title 17, Code of Federal
Regulations, or any successor regulation.
``(f) Additional Regulation.--The Commission may, by rule,
establish further disclosures, conditions, or requirements to increase
the information provided by issuers with respect to repurchases of
common stock.''.
(c) Form 8-K.--Not later than 1 year after the date of enactment of
this Act, the Securities and Exchange Commission (referred to in this
section as the ``Commission'') shall revise the form described in
section 249.308 of title 17, Code of Federal Regulations, or any
successor regulation (commonly known as ``Form 8-K''), to require the
disclosure of the information described in section 9A(c) of the
Securities Exchange Act of 1934, as added by subsection (b).
(d) Study.--Not later than 1 year after the date of enactment of
this Act, the Commission shall submit to Congress--
(1) the results of a study conducted by the Commission
regarding the impact of this section, and the amendments made
by this section, on thinly traded securities; and
(2) recommendations regarding any changes to paragraph (4)
of section 9A(d) of the Securities Exchange Act of 1934, as
added by subsection (b) of this section, that the Commission
determines to be necessary.
SEC. 4. WORKER DIVIDEND.
(a) Definitions.--In this section--
(1) the term ``Commission'' means the Securities and
Exchange Commission;
(2) the term ``covered issuer''--
(A) means an issuer, a class of equity securities
of which is registered pursuant to section 12 of the
Securities Exchange Act of 1934 (15 U.S.C. 78l); and
(B) includes a consolidated subsidiary of an issuer
described in subparagraph (A);
(3) the term ``eligible worker'', with respect to a covered
issuer, means a worker with respect to the covered issuer who,
in a fiscal year--
(A) performs services for the covered issuer for
not fewer than 30 days;
(B) as part of carrying out a contract described in
paragraph (10)(A)(iv)(I)(cc), performs services or
provides goods pursuant to that contract for not fewer
than 30 days; or
(C) performs services for an employer described in
paragraph (10)(A)(v) for not fewer than 30 days;
(4) the terms ``employ'', ``employee'', ``employer'', and
``goods'' have the meanings given those terms in section 3 of
the Fair Labor Standards Act of 1938 (29 U.S.C. 203);
(5) the terms ``exchange'' and ``issuer'' have the meanings
given those terms in section 3(a) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a));
(6) the term ``executive officer'', with respect to a
covered issuer, means--
(A) the president of the covered issuer;
(B) any vice president of the covered issuer who is
in charge of a principal business unit, division, or
function of the covered issuer, such as sales,
administration, or finance;
(C) any other officer of the covered issuer who
performs a policymaking function for the covered
issuer; and
(D) any other individual who performs a similar
policymaking function to that described in subparagraph
(C);
(7) the term ``Form 10-K'' means the form described in
section 249.310 of title 17, Code of Federal Regulations, or
any successor regulation;
(8) the term ``Form 10-Q'' means the form described in
section 249.308a of title 17, Code of Federal Regulations, or
any successor regulation;
(9) the terms ``franchisee'' and ``franchisor'' have the
meanings given those terms in section 436.1 of title 16, Code
of Federal Regulations, as in effect on the date of enactment
of this Act; and
(10) the term ``worker''--
(A) means, with respect to a covered issuer--
(i) an employee who is employed by the
covered issuer;
(ii) an individual, other than an employee
described in clause (i), who is engaged by the
covered issuer to perform services, including
by working as an independent contractor,
without regard to--
(I) the label or classification
assigned to the individual, or used to
refer to the individual, by the covered
issuer; and
(II) whether the individual has
established, and is the sole owner of,
a single-member limited liability
company;
(iii) an employee who is--
(I) employed by an employer--
(aa) other than the covered
issuer; and
(bb) that is privately
held; and
(II) supplied by the employer
described in subclause (I) to perform
services for the covered issuer;
(iv) an employee who--
(I) is employed by an employer--
(aa) other than the covered
issuer;
(bb) that is privately
held; and
(cc) with which the covered
issuer enters into a contract,
under which that employer
performs services for, or
provides goods to, the covered
issuer; and
(II) performs services or provides
goods pursuant to the contract
described in subclause (I)(cc); and
(v) an employee who is employed by an
employer--
(I) other than the covered issuer;
(II) that is privately held; and
(III) that has a relationship or
arrangement with the covered issuer
such that the employer is a franchisee
and the covered issuer is a franchisor;
and
(B) does not include an executive officer of a
covered issuer.
(b) Requirements.--
(1) Calculation of worker dividend.--For the purposes of
the requirements of this section, for a fiscal year (referred
to in this section as the ``covered year''), the payment
described in paragraph (3)(A) shall be calculated as follows:
(A) Adding the following amounts:
(i) In that covered year, the total amount
spent by the covered issuer on the purchase of
common stock (or an equivalent interest,
including a unit of beneficial interest in a
trust or limited partnership or a depository
share) of the covered issuer, without regard to
the means or method used by the covered issuer
to effect that purchase.
(ii) The total amount of any increase in
ordinary dividends declared and paid by the
covered issuer in the covered year with respect
to the common stock of the covered issuer, as
compared with that amount in the fiscal year
preceding the covered year.
(iii) The total amount spent by the covered
issuer in the covered year on special or 1-time
dividends with respect to the common stock of
the covered issuer.
(B) Dividing the sum obtained under subparagraph
(A) by 1,000,000.
(2) Reporting.--Each covered issuer shall--
(A) in each Form 10-K submitted by the covered
issuer, disclose, with respect to the covered year to
which the submission applies--
(i) each component of the calculation
described in paragraph (1), and the total
amount of that calculation, if that calculation
results in an amount that is greater than zero;
and
(ii) the number of eligible workers with
respect to the covered issuer, which the
covered issuer shall identify by type of worker
and employer; and
(B) not later than 30 days after the last day of a
covered year, provide to each worker with respect to
the covered issuer a document, in physical or
electronic form, that discloses the number of hours
that the worker worked during the covered year.
(3) Payment and verification.--
(A) In general.--Not later than the last day of the
first fiscal quarter that begins after the end of a
covered year, if the calculation under paragraph (1)
with respect to that covered year results in an amount
that is greater than zero, each covered issuer shall
issue to each eligible worker with respect to the
covered issuer for that covered year a cash payment as
follows:
(i) An eligible worker who was employed, or
otherwise engaged, to perform services for the
covered issuer, perform services or provide
goods pursuant to a contract described in
subsection (a)(10)(A)(iv)(I)(cc), or perform
services for an employer described in
subsection (a)(10)(A)(v) for fewer than 520
hours during the covered year shall receive 25
percent of the amount calculated under
paragraph (1).
(ii) An eligible worker who was employed,
or otherwise engaged, to perform services for
the covered issuer, perform services or provide
goods pursuant to a contract described in
subsection (a)(10)(A)(iv)(I)(cc), or perform
services for an employer described in
subsection (a)(10)(A)(v) for not fewer than 520
hours and fewer than 1,040 hours during the
covered year shall receive 50 percent of the
amount calculated under paragraph (1).
(iii) An eligible worker who was employed,
or otherwise engaged, to perform services for
the covered issuer, perform services or provide
goods pursuant to a contract described in
subsection (a)(10)(A)(iv)(I)(cc), or perform
services for an employer described in
subsection (a)(10)(A)(v) for not fewer than
1,040 hours and fewer than 1,560 hours during
the covered year shall receive 75 percent of
the amount calculated under paragraph (1).
(iv) An eligible worker who was employed,
or otherwise engaged, to perform services for
the covered issuer, perform services or provide
goods pursuant to a contract described in
subsection (a)(10)(A)(iv)(I)(cc), or perform
services for an employer described in
subsection (a)(10)(A)(v) for not fewer than
1,560 hours during the covered year shall
receive 100 percent of the amount calculated
under paragraph (1).
(B) Form 10-q.--Each covered issuer that is
required to issue payments under subparagraph (A) with
respect to a covered year shall certify, in the first
Form 10-Q submitted by the covered issuer after the
date on which the covered issuer is required to make
the payments, that the covered issuer made the
payments.
(C) Inability to make payments.--If a covered
issuer is required to issue a payment under
subparagraph (A) and is unable to issue the payment
because the individual to whom the payment relates is,
as of the date on which the payment is due, no longer a
worker with respect to the covered issuer, the covered
issuer shall--
(i) in a manner that the Commission shall,
by rule, establish, deposit in an escrow
account the amount of the required payment; and
(ii) in the submission under subparagraph
(B) to which the payment relates, describe the
efforts of the covered issuer to issue the
payment.
(c) Enforcement.--With respect to a covered issuer that is required
to issue the payments described in subsection (b)(3)(A) and fails to
issue those payments--
(1) the covered issuer--
(A) for the 5-year period beginning on the date on
which the covered issuer was required to issue the
payments, may not make a purchase to which section 9A
of the Securities Exchange Act of 1934, as added by
section 3(b) of this Act, applies, except to account
for common stock that is issuable under an employee
stock or option award in any such year; and
(B) for each of the first 5 fiscal years after the
covered year with respect to which the covered issuer
was required to issue the payments, shall issue those
payments in the amount required with respect to the
covered year; and
(2) the Commission may, in accordance with applicable laws
and regulations, bring an enforcement action against the
covered issuer.
(d) Protections for Workers.--
(1) Prohibition.--No covered issuer may discharge or in any
manner discriminate against any worker with respect to the
covered issuer with respect to the compensation, terms,
conditions, or other privileges of employment of the worker
because the worker is eligible to receive a payment from the
covered issuer under subsection (b)(3)(A).
(2) Private right of action.--
(A) In general.--Any covered issuer that fails to
issue a payment to a worker with respect to the covered
issuer that is required under subsection (b)(3)(A)
shall be liable to that worker in the amount of that
payment and in an additional amount as liquidated
damages.
(B) Jurisdiction.--An action to recover the
liability described in subparagraph (A) may be
maintained against a covered issuer described in that
subparagraph in any Federal or State court of competent
jurisdiction by any 1 or more workers described in that
subparagraph for and on behalf of that worker or
workers and other workers similarly situated, except
that no worker shall be a party plaintiff to any such
action unless the worker gives consent to become such a
party and that consent is filed in the court in which
the action is brought.
(C) Attorney's fees.--The court in which an action
is brought under subparagraph (B) shall, in addition to
any judgment awarded to the plaintiff or plaintiffs in
the action, allow a reasonable attorney's fee to be
paid by the defendant and the costs of the action.
(D) Arbitration.--Notwithstanding any other Federal
or State law, rule, or regulation, any agreement to
arbitrate any dispute involving a covered issuer and a
worker with respect to the covered issuer shall not
apply with respect to the right of the worker to bring
an action under this paragraph.
(e) Rules of Construction.--
(1) In general.--Nothing in this section may be construed
to--
(A) supersede any provision in any collective
bargaining agreement to which a covered issuer is a
party; or
(B) prevent an individual from receiving multiple
payments under subsection (b)(3)(A) for a covered year
if the individual is an eligible worker with respect to
more than 1 covered issuer in that covered year.
(2) Other profit-sharing agreements.--No other profit-
sharing agreement between a covered issuer and any worker with
respect to the covered issuer, other than as specifically
described in this section, may be construed to satisfy the
requirements of this section.
SEC. 5. COMMISSION REQUIREMENTS.
(a) Definition.--In this section, the term ``Regulation S-K'' means
part 229 of title 17, Code of Federal Regulations, or any successor
regulations.
(b) Updates.--Not later than 1 year after the date of enactment of
this Act, the Securities and Exchange Commission shall make any updates
to Regulation S-K that are required as a result of this Act and the
amendments made by this Act.
<all>
Introduced in Senate
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Committee on Banking, Housing, and Urban Affairs. Hearings held. Hearings printed: S.Hrg. 116-456.
Committee on Banking, Housing, and Urban Affairs. Hearings held.
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