The need to understand the basic law and to adopt clear policies applicable to sexual harassment is particularly important given the problem's sensitive nature and potential liability to school districts. This monograph is designed to assist school attorneys and administrators in understanding the law regarding sexual harassment of employees and students and to serve as a guide for preventative measure and policy development to reduce the incidence of sexual misconduct and respond appropriately to harassment claims. The first section provides an overview of the 1986 Supreme Court Decision "Meritor Savings Bank v. Vinson," followed by brief descriptions of 43 sexual harassment cases that can be used for further reference. Next, post-"Meritor" developments in sexual harassment laws are discussed. The third section outlines practical advice on handling sexual harassment in schools. Appendices A through F contain a copy of the "Meritor Savings Bank v. Vinson" decision, Equal Employment Opportunity Commission (EEOC) guidelines on sexual harassment, EEOC policy guidance for sexual harassment issues and sexual favoritism, the U.S. Department of Education's booklet on sexual harassment of students, and sample policies on sexual harassment of employees and students. (EJS)