A court decision issued Friday could limit on national security grounds the rights of many federal employees to challenge personnel actions against them, even if the employees don’t have access to classified information.

The decision came from a panel of the U.S. Court of Appeals for the Federal Circuit in a case involving two Defense Department employees, one indefinitely suspended and the other downgraded, after management found each ineligible to hold a sensitive position.

The court reviews decisions by the Merit Systems Protection Board, a quasi-judicial agency that handles appeals by federal employees of personnel actions against them. MSPB had held its first oral arguments in 27 years in the case, Berry v. Conyers.

At issue was a 1988 Supreme Court ruling, Dept. of Navy v. Egan, which limited employee rights to challenge agency decisions to deny or revoke security clearances. That case held that MSPB did not have the authority to look into the reasons behind those determinations but could review only whether agencies had followed their own procedures and whether a transfer to a position not requiring a clearance was feasible.

MSPB ruled in the present case that the limited right of review under Egan applied only to cases involving security clearances. But the appeals court, in a divided opinion, held that appeal rights are similarly limited for “noncritical sensitive” positions — even if the employee does not have a security clearance.

“The core question is whether an agency determination concerns eligibility of an employee to occupy a sensitive position that implicates national security,” the opinion said.

Tom Devine, legal director of the Government Accountability Project, a whistleblower advocacy organization, said a “noncritical sensitive” label “can be applied to virtually any federal job.” He noted that the employees in the case were lower-level — an accounting technician and a commissary worker — and said that the designation also has been applied to positions including paralegals, and employees of agency inspector general offices.

“The Federal Circuit has given agencies a blank check to categorize almost any federal job as ‘sensitive’ — demoted from the civil service merit system to a national security world of secret law,” he said.

The dissenting judge said the majority opinion “forecloses the statutorily-provided review of the merits of adverse employment actions taken against civil service employees merely because those employees occupy a position designated by the agency as a national security position.”

“The majority’s holding allows agencies to take adverse actions against employees for illegitimate reasons, and have those decisions shielded from review simply by designating the basis for the adverse action as ‘ineligibility to occupy a sensitive position,’” Circuit Judge Timothy B. Dyk wrote.

“It is likely that we will seek further review in Berry v. Conyers,” said Andres Grajales, assistant general counsel of the American Federation of Government Employees, which represented the employees in the appeal. ”Beyond that, it is too early to comment other than to say that we are, quite obviously, disappointed with the outcome.”