The Department of the Navy v. Egan case in 1987 revolved around Thomas C. Egan, a civilian employee at a naval shipyard who was denied security clearance and subsequently lost his job as a result. The Merit Systems Protection Board upheld this decision, but it was reversed by the Federal Circuit Court on appeal, which ruled that the board had authority to review such decisions for arbitrariness or capriciousness. However, when brought before the Supreme Court, they disagreed with this ruling and held that under existing law (the Civil Service Reform Act), there is no provision granting authority to review an agency's security-clearance determination; therefore it falls outside of their jurisdiction. They further noted that these types of determinations are sensitive matters often involving classified information and should be left up to those agencies specifically designated by Congress - not administrative judges or boards without explicit statutory authorization. This landmark case established precedent regarding separation of powers within federal employment law and national security issues – reinforcing executive branch discretion over access to national defense information while limiting judicial oversight in such matters.

In the dissenting opinion for the Department of the Navy v. Egan case, Justice Thurgood Marshall argued that the majority's decision to deny judicial review over security clearance decisions was a departure from established principles of administrative law. He contended that nothing in either Constitution or federal statute explicitly precludes courts from reviewing such decisions. Furthermore, he pointed out that even though national security is involved, it does not mean these matters are beyond judicial competence; courts regularly deal with sensitive issues and classified information without compromising national security interests. Marshall also criticized the majority’s reliance on historical practice as justification for their ruling, stating this approach could lead to unchecked executive power if taken too far.