The Department of the Army has agreed to favorably review, and probably upgrade to "honorable," the discharges of tens of thousands of soldiers who have been released from the military as unsuitable for service because of alleged personality disorders.

>TO> Who received "general" discharges for personality reasons challenged the constitutionality of the Army's practice of using "general" discharges in such cases.

While an Army spokesman said there is no difference in the types of financial benefits available to veterans under the two types of discharges, persons familiar with the discharge procedures said the "general" discharges for personality disorders stigmatized ex-soldiers in their attempts to find jobs and advance in employment.

An Army memo written last year in connection with the lawsuit said that about 50,000 persons received these personality-based general discharges between 1968 and 1975. "Cases from past years have revealed that persons have in effect, in particular cases, been penalized for their personality disorders by receiving general discharges because of the disorders," the memo said.

General discharges often were used in cases where persons, for various emotional reasons, did not "fit" into the military lifestyle, according to layers involved in the case. The Military personnel ascribing such characterizations as "personality disders" often were not psychiatrists, the Army conceded in court papers.

In the future, a soldier's discharge certificate "must be based solely on conduct and efficiency ratings, with-out regard to personality disorder," the Army said in announcing new regulations. "This change is designed to ensure that persons are not stigmatized simply because of a medical evaluation," the statement continued.

The settlement signed by U.S. District Judge Aubrey E. Robinson Jr. emphasized that the Army Discharge Review Board will review all applications for upgraded discharges with "compassion" and upgrade the discharges to honorable except when there are specific, demonstrable reasons for not doing so.

In an attempt to locate persons who may be affected by the settlement, the Army Discharge Review Board already has mailed out 10,000-12,000 letters to persons discharged since 1958 and is preparing to mail out more notices, according to court papers.

While the Army could not be precise on the scope of the agreement last night, the Army legal memo written last year said "former service members who were discharged since World War II because of personality disorders" could have their records upgraded if they otherwise had clean service records and were discharged without being diagnosed by a psychiatrist.

Although the settlement involved only the Army, attorneys for the National Military Discharge Review Project of the American Civil Liberties Union, which sponsored the suit, said they would attempt to have it apply to the other military services as part of an attempt to uniformly apply policy decisions across all branches of the military.

The two persons who brought the suit were from New York and Puerto Rico, according to their attorney, Peter Raven-Hansen of Hogan and Hartson. He said that many state and local governments automatically exclude veterans without honorable discharges from government jobs, and that one of the persons he represented brought the suit when his "general" discharge kept him from applying for a state prison job.

An Army lawyer said persons diagnosed as suffering from psychoses or severe neuroses are discharged through medical channels and almost always receive honorable discharges. However, the lawyer said persons with personality disorders -- which could range from bedwetting to severe homesickness to an inability to wake up on time -- are usually discharged through administrative channels and receive the general discharges.

The Army said it was entering the agreement and making the regulation changes "to eliminate perceived inequities in the discharge system (and) render relief to persons discharged in past years who were harmed as a result of the inequities."

In acknowledging that thousands of persons may be eligible for honorable discharges as a result of changes in regulations concerning "general" discharges, the Army has made the following provisions for processing the requests:

"Former service members who think they may be affected by these changes may apply for relief to the Army Discharge Review Board, Department of the Army, Washington, D.C., 20310, identifying the 'retroactive change to AR 635-200' as the reason for the application."