Legal implications of competency-based education (CBE) could be substantial, because the CBE approach would articulate specific standards applicable in employer and institutional actions which are now upheld by the courts for lack of accountability standards. Six problem areas relating to CBE's effect on employment and educational institutions are discussed, along with a list of further research needs in each area: discriminatory employment practices, irrational employment practices, process standards, institutional accountability, job security issues, and implementation problems. Even if not fully implemented, CBE could have a profound effect on current educational practices, on the broad domains of employment selection and retention, and on government regulation of licensing and credentialing practices. (MF)