Use of nationally standardized tests to determine teacher competency continues to be a subject for review in state and federal courts. School district policies have promoted minimum score requirements as a basis for employment decisions concerning certification, hiring, renewal, promotion, and merit pay. Legal challenges to these policies focus upon the constitutional guarantees of due process and equal protection and on the "disparate impact" provisions of Title VII of the Civil Rights Act of 1964. The most often utilized objective test is the National Teacher's Examination. The extent to which districts can rely upon competency testing in setting policy is uncertain. Sole reliance on a test for making adverse employment decisions, or setting salary differentials or standards for merit pay, however, remains a suspect practice particularly where discrimination is at issue. Legal challenges may increase as teachers' unions and civil rights groups target testing in situations other than certification. School boards should draft testing policies that correspond to appropriate educational objectives. Employees should be advised of identified deficiencies and should be provided with opportunities for reexamination. Despite reluctance to intervene in educational policymaking, judges often are sensitive to employment litigation that cross-cuts social issues. To minimize complications, an agreement between parties may permit equitable use of competency examinations. (CJH)