The former controller for Trane, a heating and cooling company, last fall became the first employee under Sarbanes-Oxley to obtain a Labor Department order for his former employer to rehire him. But instead of doing so, the company spent months fighting the order before settling with Windhauser in April. For the 58-year-old finance executive, who says he suffers from heart disease and diabetes, it was just another blow in his 18-month battle.

Three years ago, the Sarbanes-Oxley Act was signed into law and hailed as a safety net for employees who stepped forward and revealed wrongdoing at their companies. But of the hundreds of people who lost jobs and filed complaints since the act was passed, only two are actually back at their jobs. Others are still waiting or settled out of court because their former employers balked, even after courts ordered them rehired.

Whistle-blowers and their lawyers say that's a big drawback of the law. Those who win their cases are eligible to get back pay, attorney's fees and a chance to get their old job back. But Windhauser says those are small rewards for the huge risks to one's livelihood.

Congress intended to make people "whole," not to make whistle-blowing lucrative, says Richard Fairfax, the Labor Department enforcement official who oversees the Sarbanes-Oxley investigations.

The Labor Department doesn't determine if financial wrongdoing actually occurred, just if the employee was dismissed in violation of the law.

Fairfax says "there's quite a lot of benefit" to the statute's whistle-blower provisions. He notes that four companies have been ordered to reinstate whistle-blowers and says the agency works hard to balance the employee and employer's rights. Although only 15% of Sarbanes-Oxley complaints are found to have merit, he says that's in line with the number of whistle-blower grievances the agency finds meritorious under other laws.

Robert Vaughn, an American University law professor, says the whistle-blower provisions in Sarbanes-Oxley offer the best employee protections in the world: "It promises changes in the workplace, in the private sector labor law and in the regulation of corporate conduct," he wrote in a law review article this year.

A high price

Windhauser's experience shows how high the price of whistle-blowing can be, even for employees who prevail under Sarbanes-Oxley.

Windhauser was hired in June 2003 as assistant controller in the Vermont and New York district of Trane, which is owned by American Standard. Shortly after he was promoted to controller four months later, Windhauser complained to his supervisor that managers were fraudulently recording expenses on financial statements. A month later, in November 2003, Trane fired Windhauser. The company later told the Labor Department it did so because Windhauser was incompetent.

It was an abrupt end to what Windhauser says he had hoped would be a fresh start. He had been "downsized" twice in the previous five years, the first time after nearly 30 years at Bausch & Lomb. His next job lasted two years until that company decided to leave the Rochester, N.Y., area. Trane seemed a perfect fit, and his quick promotion seemed to support that. But within weeks, he was fired.

After her husband came home in shock because he lost his job so soon after being promoted, Jeanne Windhauser called the Securities and Exchange Commission to learn more about his rights. The couple hired a lawyer and drafted a Sarbanes-Oxley complaint that was filed in February 2004.

"I felt very strongly that we had to go forward, because there has to be a point at which a law stands up for the little guy in this structure," Jeanne says.

But the process has left them questioning the 3-year-old law, despite what they describe as considerable help from Labor Department officials. "The experience has been one of frustration and a tremendous amount of doubt regarding our ability to get some kind of support," Jeanne says.

Those who file the complaints and follow them through a labyrinth of legal and bureaucratic hurdles often place themselves in risky financial and emotional positions.

Windhauser says his diabetes, worsened with stress, caused headaches and stomach problems. Jeanne, who says she suffers from Lupus, had a flare-up. The couple maxed out their credit cards, borrowed from family, could barely sleep and found themselves in the unusual position of arguing in front of their teenage son.

"You do a lot of crying, and there's a lot of soul-searching and a lot of stress within the family," Windhauser says. "Your pride's been hurt and your honor challenged, but you can't allow it to get the best of you."

Windhauser was out of work for several months until he got a temporary job a year ago at a small food service company. The job evolved into a full-time controller position, though Windhauser says his salary and benefits are about 25% lower than they were at Trane and he has less room for advancement. Still, he's thrilled to be working. Labor Department documents show he settled with Trane in April, but that an administrative law judge in June ordered Trane to pay Windhauser $70,000 in penalties.

American Standard spokeswoman Lisa Glover says the "matter has been settled," adding that "the company had procedures in place to review complaints made by employees and others, and we take these matters very seriously."

Back on the job

Even when they return to work, fired whistle-blowers don't exactly get to savor the victory. Linda Kimble was the first person to get her job back thanks to Sarbanes-Oxley. A rental car agent with Hertz at the Westchester, N.Y., airport, she complained to managers in early August 2003 that Hertz was selling insurance to clients who already had insurance in their contracts. By the end of the month, she was fired.

The Labor Department ruled that she was fired in retaliation for complaining about the unnecessary insurance sales. This April, the department ordered Hertz, which is owned by Ford Motor, to rehire Kimble and pay $154,364 in legal fees, back pay and interest, Labor Department documents show.

But Kimble's problems aren't necessarily finished. Richard Broome, vice president of corporate affairs at Hertz, says Kimble's dismissal was unrelated to the charges, and the company is trying to get the case dismissed.

Kimble's lawyer, Noah Kinigstein, says Kimble always knew she would prevail despite the stress that being out of her job for 18 months put on her family. (She is married and has a young son.) Though being back in the same office is "very strange," Kinigstein says, "to date, there have not been any blatant acts of retaliation, and she hopes that this remains during her employment."

The other whistle-blower back at work courtesy of Sarbanes-Oxley is Scott Bechtel, who returned to his office two weeks ago.

Bechtel and Willie Jacques were vice presidents at Fairfield, Conn.-based Competitive Technologies, an invention management and technology company. According to Labor Department documents, the men raised concerns three times in late 2002 and early 2003 about the company's failure to disclose oral agreements between outside consultants and the company's CEO that put the consultants on the payroll on a commission-only basis.

According to Labor Department documents, the CEO criticized the two after their complaints, and tried to embarrass them at meetings. In June of 2003, Competitive Technologies fired both. They filed complaints in September of 2003.

Martha Kent, a regional Labor Department official, told Competitive Technologies lawyers in a letter that there was no evidence the pair had performance problems, as the company suggested.

This February, the Labor Department ordered Competitive Technologies to rehire Bechtel and Jacques and pay back wages and attorneys fees. In June, Competitive Technologies said it had hired Jacques as an outside consultant. Bechtel is back at his old job, but in a somewhat tenuous situation.

Competitive Technologies agreed to rehire him only after an appeals court denied its request for a stay of his reinstatement order. The company says Bechtel's rehiring will be effective until the court lifts the order denying the stay or the company wins its appeal pending before an administrative law judge, expected within three months.

Jonathan Snare, an acting assistant secretary of labor, said the court's action "affirms that the law does not give the employer the option to refuse reinstatement during the Sarbanes-Oxley appeal process." Company spokesman Johnnie Johnson says it doesn't comment on pending litigation.

Jacques did not return two calls seeking comment. Bechtel could not be reached.

Not without problems

Even the Labor Department's Fairfax acknowledges the Sarbanes-Oxley Act doesn't solve all the problems when it comes to whistle-blower protection. "The important thing is, we can only do what Congress tasked us with doing," he says.

David Martin, a former director of corporation finance at the SEC, says he believes one effect of the 3-year-old law is that more companies are working with employees who have grievances.

"It is almost always preferable to handle complaints internally than through the federal government," says Martin, now a partner at the law firm Covington & Burling. "The right way is to have a corporate culture that shows why we're all in it together: because it's best for all of us if no one violates the law."

Louis Clark, president of the Government Accountability Project, which represents federal and corporate whistle-blowers, says his group is withholding judgment about the law's effectiveness until it sees the decisions in some upcoming court cases.

Windhauser is watching, too. He says administrative law judges who handle whistle-blower cases need more authority to enforce the law if companies won't comply with their orders. He thinks companies should face large monetary sanctions if they refuse to rehire workers.

He also thinks government officials need to be more realistic. "The Department of Labor says most companies should want to welcome back people who are open and honest, but it doesn't happen that way," Windhauser says.

Fairfax says there are some things laws such as Sarbanes-Oxley will never be able to do in terms of recognizing the courage that whistle-blowers show. "We can't actually put a price on going out on a limb and reimburse them for that," he says. "It takes a certain kind of person who can do it."

-- Jayne O'Donnell