A federal board, in a ruling in favor of a disabled veteran, has called into question the future of the Outstanding Scholar program, which provides agencies with a streamlined process for hiring job applicants who have a high grade-point average or class standing.

The Merit Systems Protection Board, which hears employee appeals in personnel disputes, found that the veteran's rights were violated when he was passed over for a job and another applicant was hired without competition through the Outstanding Scholar program.

An estimated 13,600 federal employees were hired through the program between 1987 and 2004, according to the Office of Personnel Management. The program operates without regard to veterans preference and some other common hiring rules, and OPM said it does not know how many program hires might have bumped qualified veterans.

Mark A. Robbins, general counsel at OPM, said the board's ruling, in its broadest sense, "challenges the entire Outstanding Scholar program." OPM has filed a petition with the merit board to have the decision reconsidered.

Until issues in the case are resolved, Robbins said, OPM has halted its hiring through the Outstanding Scholar program. OPM has about 30 to 40 applicants who are undergoing background checks, and their employment offers have been put on hold, he said.

"We have advised other federal agencies of what we are doing," Robbins said, adding that "each agency needs to determine the appropriate action for their internal workings."

The case was filed more than three years ago by David Dean, a disabled Vietnam veteran who applied for a job as a personnel management specialist with the Agriculture Department in Columbia, S.C.

Dean was notified that he was qualified for the job, then learned that the job went to an Outstanding Scholar who was not a veteran. He claimed the department "willfully and deliberately" violated civil service law and filed a complaint.

The board found that Dean was entitled to a notice from the agency that it planned to pass him over and was entitled, as a veteran, to an opportunity to seek OPM review.

According to the board's ruling, the Outstanding Scholar program cannot be relied upon to avoid fair and open competition for government jobs when veterans' rights are at issue, unless an exception had been made through a presidential order or law. That was not done for the Outstanding Scholar program, which was created as a supplemental hiring process as part of a 1981 consent decree known as Luevano.

The federal consent decree grew out of a civil lawsuit brought by a group of minority job applicants who contended that they failed a written civil service test because it was biased.

The Outstanding Scholar program has been faulted by critics, in part because agencies have used it as an easy way to hire for some federal jobs. One study conducted by the MSPB suggested that most agencies have used the program to improve the representation of women in the government.

Another Setback for DHS

A federal judge has ruled against the Department of Homeland Security for a second time in a case brought by unions that contend that proposed workplace rules would gut their collective bargaining rights.

U.S. District Judge Rosemary M. Collyer blocked the rules in August, saying the department's plan failed to provide for binding contracts. The department asked the judge to modify the injunction and let it move ahead with implementation of a new labor-management system.

Collyer ruled last week that the department's proposed remedy fell short because it would still allow the department to disavow or ignore negotiated contracts by claiming that they would interfere with the agency's mission.

The judge faulted the department for invoking "the familiar mantra that this degree of 'flexibility' is needed to protect homeland security and combat terrorism." Congress endorsed more flexible rules at the department, she said, "but not at the expense of ensuring that employees could engage in collective bargaining."

Colleen M. Kelley, president of the National Treasury Employees Union, called the judge's opinion "a very significant win for all Homeland Security employees." NTEU lawyer Elaine Kaplan said the ruling showed that "there is no inconsistency between ensuring collective bargaining rights and protecting homeland security."

Larry Orluskie, a department spokesman, said the administration will study the decision and "consider next steps." The government has 60 days to file an appeal.

E-mail: barrs@washpost.com