The Southwest Virginia man at the center of a nationally watched whistle-blower case has the federal government behind him as he takes his latest demand to court.

But the directors of Cardinal Bankshares Corp. last week joined the tug of war, filing a motion to intervene as co-defendants and claiming that David Welch is too incompetent to be reinstated as chief financial officer of their company.

For the second time, Welch, 56, is asking the U.S. District Court in Roanoke to enforce a Department of Labor judge's 2005 ruling that he is entitled to his old job with back pay.

The government has joined the case out of concern that if Welch loses this round, it could impair future efforts to protect whistle-blowers under the Sarbanes-Oxley Act of 2002.

Spurred by such cases as Enron and WorldCom, Sarbanes-Oxley was passed to protect employees who are retaliated against for reporting potential securities law violations.

The Occupational Safety and Health Administration, which handles initial investigations under the whistle-blower provision, has received 790 complaints under the act since its inception and May 31 of this year.

Welch filed a complaint under the act shortly after he was fired from Cardinal Bankshares in October 2002. His termination came not long after he raised concerns at work about financial reporting, alleged insider trading and internal accounting controls at the company.

Although none of Welch's accusations has been substantiated, he is still protected under the legislation so long as his claims were based on a reasonable belief that fraud occurred or is occurring.

Welch's journey through the system began with a complaint to OSHA, which rejected his claims in 2003.

But in February 2005, Department of Labor Administrative Law Judge Stephen Purcell made an official ruling that ordered Cardinal Bankshares to rehire Welch as CFO and pay him more than $64,000 in back pay and damages, as well as $108,000 in legal fees.

Cardinal Bankshares' appeal of that ruling is pending.

Welch believes he should have been granted an interim reinstatement immediately, regardless of any pending appeals. He took that claim to federal court in Roanoke in August 2005, requesting that a judge enforce Purcell's order.

But U.S. District Judge Glen Conrad refused to do that based on two concerns that Welch's attorney now says have been addressed.

First, the Administrative Review Board of the Department of Labor ruled in March that Purcell's order really did constitute a "preliminary order of reinstatement." Then, the ARB denied Cardinal Bankshares' motion for a stay.

Welch's new petition asks that Cardinal Bankshares be ordered to pay him more lost wages and attorney fees on top of what Purcell ordered in 2005.

In order to meet the criteria to intervene on either side, the United States and Cardinal Bankshares' directors must prove that they have an interest in the outcome and that current parties to the litigation are not fully representing their interests.

"Because the DOL [Department of Labor] is the agency responsible for enforcing Sarbanes-Oxley's whistle-blower protection provision, it has a significant protectable interest in assuring that Cardinal complies with [Purcell's] order," the government's motion states.

Said U.S. Attorney John Brownlee, "Whistle-blowers like David Welch must be protected from corporate retaliation."

Bruce Shine, Welch's lawyer, guessed that the strength of the case made it a more attractive option for the Department of Labor to get behind.

The bank's directors argue in their motion that "if Cardinal is forced to reinstate Welch, the Directors have no confidence that Cardinal's future regulatory and financial statements and reports would be prepared competently and accurately."

Shine said the directors' motion "borders on scurrilous."

No hearing dates have been set for the motions.

Welch said Tuesday that he still wants to return to Cardinal Bankshares in part because publicity over the case has made it virtually impossible for him to find another job.

"I could judge what kind of treatment I would get when I go back," he said.