Margery Waxman speaks for management, which in this case is the U.S. government. She can't believe some of the rulings that come across her desk.

At the Office of Personnel Management, where she is general counsel, Waxman points to a sheaf of decisions involving misconduct by federal employes, all outside working hours.

Within the past year and a half, describing just a few of the cases, there have been reports of "incestuous incidents" in the top-secret National Security Agency, child molesting in the Air Force and marijuana smoking in the Bureau of Prisons.

The three involved in those episodes were fired. All appealed to the new Merit Systems Protection Board. One dismissal was upheld, for smoking marijuana.

To the officials at OPM, established last year under the 1978 Civil Service Reform Act, it is all quite outrageous. In their view, there is some off-duty conduct that is so offensive that it warrants dismissal without any ifs, ands or buts.

It amounts to a new fight over an old -- and largely unsettled -- issue. Court rulings of the past have put murder and manslaughter clearly beyond the pale, but beyond that, the dividing line for off-duty conduct that justifies dismissal from the federal service without further ado has never been especially clear.

There is, in fact, a certain logic to the rulings handed down by the Merit Board's hearing examiners in the cases that have OPM in a tizzy. The courts have held that the mere fact that a government worker has committed an immoral or disgraceful act -- even a criminal act -- will not justify a discharge unless what he or she has done clearly detracts from the so-called efficiency of the agency that hired him or her.

Congress took the ruling a step further in the 1978 act with an amendment prohibiting federal agencies from discriminating against any civil servant for conduct that does not "adversely affect" the employe's performance or the performance of others.

Some of the cases pending before the full three-member Merit Board suggest that government agencies are doing a miserable job of making their cases.

Take the dispute at the National Security Agency. It started last year when NSA's office of security obtained an affidavit from a longtime employe who acknowledged having engaged in "sexual acts" with his daughter, twice when she was 8 or 9 and again when she was 14.He was fired last August. The NSA said he "no longer met the suitability requirements for employment in a critical sensitive position requiring access to the highest levels of classified information."

The Merit Board's hearing officer was not impressed. The man had been with NSA for 13 years. His supervisor said his work had always been "the highest level of outstanding." He was known for his honesty, and widely regarded as a "company man" whose work came first. NSA produced no evidence to the contrary. Beyond that, the examiner found, the man had sought help from an NSA physician before the agency became aware of his conduct.

"The possibility of mere embarrassment to the agency is not sufficient," the examiner held Jan. 8 in overturning the dismissal.

Waxman protested in an appeal to the three-member Merit Board where the case is now awaiting a decision. She contends "a clear nexus" was shown since the examiner conceded a cloud had been cast on the NSA officer's "general trustworthiness." She also maintains his behavior warranted lifting his security clearance, without which one cannot work at NSA.

"The relevant laws and regulations," she said in a memo to the Merit Board, "provide that clearance may be granted only to individuals found to be trustworthy, stable, and of excellent character and discretion."

The Air Force incident is even murkier because of the way it was handled. In that case, a civilian mechanic at McClellan Air Force Base in California pleaded guilty last year to child-molesting, and was sentenced to a year in jail. The Air Force listed him as AWOL when he started serving his time and refused to process his application for a work furlough program that would have allowed him to return to his job. Then it fired him for being "unable to fulfill the duties and responsibilities of your position."

The Merit Board examiner in that case ruled in the mechanic's favor.

Waxman is appealing this one, too, although she concedes that the government's case would be stronger if the Air Force had fired the mechanic more straightforwardly.

The last case was plucked out for review, along with several others, by the Merit Board. In that one, a correctional officer at the Lewisburg, Pa., federal penitentiary admitted to using a "small quantity of marijuana" in the privacy of his home and said it had been available to fellow employes.

The Bureau of Prisons fired him last September, contending that he could no longer be relied upon to enforce prison rules against contraband, including marijuana, with sufficient vigor. The bureau also contended that the man might be subjected to "pressures and blackmail" if inmates learned of his behavior. The Merit Board's examiner upheld the dismissal.

Officials at the Merit Board, which has the job of protecting employe rights and adjudicating their disputes with management, say that the misconduct issue is "very hot" right now. Its deputy general counsel, Donald L. Cox, says the board is hoping to come up with one or perhaps a series of decisions that will clarify what kind of conduct can be punished under the new law and under what circumstances.

"We're going to look over as many important issues as we can," he says. "We're taking a fresh look."