In the United States v. Testan et al., 1975, two federal employees sued for back pay after they were denied reclassification to a higher grade level within their agency. The plaintiffs argued that they had been performing duties equivalent to those of a higher grade and therefore deserved retroactive compensation. However, the Supreme Court ruled against them stating that there is no inherent right in federal employment to any particular position or salary unless explicitly provided by law or regulation. The court held that an employee's claim must be decided based on statutory rights rather than perceived notions of fairness or justice; it further stated that not every governmental personnel action is actionable under the Back Pay Act of 1966 which provides relief only when an employee has undergone an unjustified reduction in pay due to wrongful classification.

In the dissenting opinion for United States v. Testan et al., Justice Brennan, joined by Justices Douglas and Marshall, argued that federal employees should be able to seek back pay for periods during which they performed duties warranting a higher grade classification but were not given such classification. They disagreed with the majority's interpretation of the Back Pay Act and civil service laws as precluding such claims. The dissenters believed these statutes could be read together in a way that would allow compensation for wrongful classifications without requiring explicit statutory authorization or an official personnel action changing an employee’s position or salary rate. They also criticized the majority's reliance on sovereign immunity principles to deny relief, arguing this was inconsistent with modern trends towards allowing more governmental liability and undermined Congress' intent in passing remedial legislation like the Back Pay Act.