This paper discusses the legal implications inherent in the competency or proficiency testing issue. Competency testing is designed to respond to the public demand for accountability by placing responsibility on the educational organization, versus the learner, to assure that students no longer leave high school functionally illiterate. Following a history of competency testing, this paper examines the current interest in it as well as legislative and judicial considerations. The paper concludes that some form of student assessment is probably needed, but the question is whether minimum competency testing is the answer. Educators must be able to scrutinize testing programs and also learn from court cases so that injuries to students are minimized. (Author/LD)