(FORTUNE Magazine) – Tailhook. New rules on college campuses against romances between professors and students. A controversial book that purports to tell the real story of Anita Hill and Clarence Thomas. And of course that staple of late-night-TV jokes, Senator Bob Packwood. In the shift and glimmer of the media kaleidoscope, sexual harassment is a constant glinting shard. Yet no headline-making subject in recent memory has stirred so much confusion. No doubt you've read your company's policy statement and, from just under its surface, you feel the legal eagles' gimlet stare. But what does sexual harassment really mean? Managers of both sexes are sifting through the past and fretting about next week. Was it all right to say I liked her dress? Is it okay to ask him out to lunch to talk about that project? Should I just stop touching anybody, even if it's only a congratulatory pat on the back? For that big client meeting in Houston, wouldn't it be less risky to fly out with Frank than with Francine? Or, for female managers, vice versa? If you think you've got reason to worry, you probably don't; the ones who do are usually unaware they have a problem. But right in your own organization, maybe even in your own department, your hallway, your pod, somebody may be so befuddled and self-destructive as to miss the point entirely. Sexual harassment is not really about sex. It's about power -- more to the point, the abuse of power. Imagine it this way. Suppose one of your most senior and valued people has a little problem. Great producer, terrific salesperson, meets every goal, exceeds every guideline, but, well, there's this one glitch: He steals things. Every time he leaves an office he takes something with him -- a pen, a coffee mug, a book, some change that was lying around. He's been at it a long time, can't seem to help it and, anyway, he's a good guy, a great guy. You're his boss. What are you going to do when he walks off with somebody's $3,000 notebook computer? That's grand larceny, and the victim is hopping mad. For more and more managers these days, the analogy fits. Let's suppose the fellow isn't stealing material things but rather chipping away at the human dignity and professional self-respect of other people. Can't seem to resist . patting fannies and whispering innuendoes. Told a subordinate he'd like to negotiate her raise at the local No-Tell Motel. Cornered a female colleague and loudly compared her physical attributes with those of the current Playmate of the Month. All the time he's producing great stuff. But the whispering behind his back is getting louder; the troops are murmuring about calling the lawyers and human resources people. What do you do with this guy? (Alas, despite a much publicized $1 million jury award in May to a male plaintiff harassed by his female boss in Los Angeles, harassers are, in nine cases out of ten, guys.) Talk to him, of course. If that doesn't work, and odds are it won't, turn him in to the human resources person in charge of these matters. And do it pronto. Otherwise you could be liable along with your employer. Unsolicited, unwelcome, and downright extortionate sexual demands are as illegal as stealing computers. So are purposeful and repeated efforts to intimidate colleagues by transforming the office into a remake of Animal House -- what the law calls ''hostile environment'' harassment. He who steals my briefcase, to paraphrase Shakespeare, steals trash. But the loss of someone's dignity, productivity, and eagerness to come to work in the morning is a theft not only from the person robbed of it, but from the company too. Sexual harassment is not a compliment on anyone's wardrobe or a friendly pat on the shoulder. It is not the occasional tasteless remark or careless quip. It is not even asking someone for a date the second time, when she's already said no once. To stand up in court, a harassment charge must rest on either a persistent and calculated pattern of antisocial behavior or a single quid pro quo -- ''You'll never get anywhere in this company unless you sleep with me'' -- that is so egregious as to leave no room for misinterpretation. The courts have recognized sexual harassment as an offense under Title VII since 1977. But the number of complaints filed with the Equal Employment Opportunity Commission has nearly doubled in the past five years, to 10,532 in 1992. It's debatable whether that rise occurred because instances of harassment increased or whether events like the Hill-Thomas hearings encouraged people who had long remained silent to speak up. The EEOC doesn't keep a record of how many cases end up in litigation; many are settled on the courthouse steps. One thing is certain. The consequences for corporations are costly. RESEARCH by Freada Klein Associates, a workplace-diversity consulting firm in Cambridge, Massachusetts, shows that 90% of FORTUNE 500 companies have dealt with sexual harassment complaints. More than a third have been sued at least once, and about a quarter have been sued over and over again. Klein estimates that the problem costs the average large corporation $6.7 million a year. Bettina Plevan, an attorney at Proskauer Rose Goetz & Mendelsohn in New York City, specializes in defending companies against sexual harassment lawsuits. She says employers spend an average of $200,000 on each complaint that is investigated in-house and found to be valid, whether or not it ever gets to court. Richard Hafets, a labor lawyer at Piper & Marbury in Baltimore, believes sexual harassment could be tomorrow's asbestos, costing American business $1 billion in fees and damages in the next five years. But the costs of sexual harassment go well beyond anything that can be measured on a profit-and-loss statement. Women, often still treated like interlopers in the office, say they feel vulnerable to the myriad subtle -- and not so subtle -- sexual power trips some men use to keep them in their place. At an Aetna Life & Casualty golfing party last September, four executives vented their resentment of female managers' presence at what had traditionally been an all-male event. Their mildest offense -- and the only one we're halfway willing to describe in a magazine your kids might see -- was calling women executives ''sluts.'' In response Aetna demoted two of the men and asked the two others to resign. Jeannine Sandstrom, a senior vice president of the executive recruiting firm Lee Hecht Harrison in Dallas, knows of instances where harassers were caught because they sent X-rated messages to their victims via voice mail or E-mail. Marvels Sandstrom: ''How self-destructive do you have to be to do something like this, knowing how easy it is to trace?'' In most cases harassment is more subtle -- and far more difficult to prove. As agonizing as it may be, women have an obligation to speak up and tell someone who is hounding them to stop it. Although federal law defines sexual harassment as ''unwelcome'' behavior, the courts say it doesn't count as such unless the offender knows it's unwelcome. Yet a 1991 study by two professors at the University of St. Thomas in St. Paul, Minnesota, revealed that, among women in a nationwide survey who said they had been victims of sexual harassment, only 34% told the harasser to knock it off; just 2% filed a formal complaint. With the economy in its current shaky state, many women may be too fearful of losing their jobs to speak up. Or they may be reluctant to be seen as whiners, either by their peers or by the people above them. But if a woman wants to file a grievance, it's important to be able to prove that she told the perpetrator to back off. Some experts suggest tape-recording the conversation or sending a registered letter (return receipt requested) detailing the offending behavior and declaring it not OK. This helps in any follow-up by human resources or legal staff, even in cases where witnesses or other direct proof of the harassment are available. AS FOR men, the majority of whom wouldn't dream of harassing anybody, they are terrified of being falsely accused -- with some reason. ''What I'm seeing lately is that companies are overreacting, and accusers are believed on the basis of very little evidence or none at all,'' says Ellen Wagner, an attorney and author who specializes in labor law. ''And the ultimate punishment, termination, is a first resort rather than a last one.'' Consider the case of Louis Kestenbaum. From 1977 to 1984, Kestenbaum was vice president in charge of guest operations at a secluded ranch and spa that Pennzoil operated in northern New Mexico. In January 1984, someone wrote an anonymous letter to Pennzoil's top management accusing Kestenbaum of sexual harassment and other misdeeds. Kestenbaum denied the allegations but was fired anyway. He sued Pennzoil and won $500,000 in damages for wrongful discharge. The reason? Pennzoil's in-house investigator admitted in court that she had relied on rumor and innuendo in compiling the sexual-harassment report that got Kestenbaum the ax. ''No attempt was made to evaluate the credibility of the persons interviewed,'' wrote the judge. Both sexes sometimes feel they're stumbling around in a minefield, lost in enemy territory without a helicopter. What makes the terrain so treacherous is that people have an inconvenient way of seeing the same behavior quite differently. Margaret Regan is a Towers Perrin partner who has conducted a senior-management training program called Respect at Work for dozens of corporations. She points out that some of what might look like sexual harassment is in reality an innocent error arising from past experience. ''My favorite example is when we ask a group of men and women, 'How many times is it all right to ask someone out after they've said no once?' '' says Regan. ''In one class I led, one of the men said, 'Ten.' The women were appalled. They said, 'Ten times? No way! Twice is enough!' '' It turned out, when he got a chance to explain his answer, that the offending fellow had to ask ten or 12 times before the girl of his dreams agreed to go to the senior prom with him in 1959. It worked out fine: They've been married for 32 years. ''Naturally ten times seemed reasonable to him,'' says Regan. ''So much of what people think about these things comes from stuff they grew up with -- and just never had any reason to question.'' Consultants who design sexual harassment workshops, and managers who have attended them, agree on one thing: The best training gives participants a chance to talk to each other, instead of just listening to a lecture or watching a film. In classes where men and women are asked to compare their impressions of the same hypothetical situation, real revelations can occur. Perhaps not surprisingly, Aetna has stepped up its training program since the infamous golfing incident last fall. Anthony Guerriero, 34, a pension consultant at the company, took the course in January. He says, ''The guys in the class were absolutely not resistant to it, not at all. In fact, it's a relief to have someone spell out exactly what sexual harassment is. The men in my session were all saying, 'It's about time.' '' Male managers aren't the only ones who benefit from the classes. Women are sometimes startled to find how widely their perceptions differ from those of other women. Janet Kalas, 45, director of Medicare administration at Aetna, has 300 people reporting to her. ''What startled me about the training was how tolerant I am,'' she says. In one group-discussion exercise, the instructor described an imaginary scenario in which a male and a female colleague, both married to others, are out of town on business. Late in the evening, they're still working on a client presentation for the next morning, and they decide to finish it in the female manager's hotel room. Recalls Kalas, ''My reaction was, Well, that's practical. What's the big deal? But other people, men and women both, were saying, 'My gosh, don't do that, it's like an invitation to this guy.' I was surprised.'' Towers Perrin recently queried executives at 600 major U.S. companies and found that about half planned to increase the amount of sexual harassment training they give managers and employees. A dozen or so big corporations have already built shining reputations among consultants and researchers for the quality, creativity, and overall earnestness of their training programs. Among them: Du Pont, Federal Express, General Mills, Levi-Strauss, Merck, and Syntex. But will they talk about what they're doing? Not a chance. ''Nobody likes to acknowledge that this problem even exists,'' says Robert Steed, who runs a consulting firm in Westchester County, New York, that specializes in sexual-harassment training. ''It makes people queasy. So their view is, the less said the better.'' Adds a public relations manager at a FORTUNE 500 company: ''The general feeling is, what if we get written up somewhere as having this terrific training program -- and then we get sued a week later? In other words, no comment.'' For a company's policy to do any good, much less be taken seriously in a courtroom, employees have to understand it. Barbara Spyridon Pope, the Navy assistant secretary who almost single-handedly exposed the Tailhook scandal, recently established a consulting firm in Washington, D.C., to advise corporate clients on how to communicate their sexual-harassment guidelines to the troops. Her surveys show that 60% to 90% of U.S. workers know there is a policy but haven't the foggiest what it says. ''Having a policy is fine, but by itself it isn't enough,'' says Pope. ''The Navy had a policy too.'' SITTING people down to discuss their differences on this issue is more than a therapeutic parlor game. Case law over the past decade has established that a company with a well-defined anti-sexual-harassmen t stance can escape liability for hostile-environment harassment. No wonder, then, that you keep getting all those policy memos and invitations to sign up for workshops. But to prevail in court, companies must also have clear procedures for handling complaints when they arise. Typically, employers choose an impartial ombudsperson, usually in the human resources department, to hear and investigate charges before the lawyers get into the act. If the complaint seems legitimate, the company must then take what the judge in a pivotal 1986 case, Hunter v. Allis-Chalmers, called ''immediate and appropriate action.'' Depending on the circumstances, this might range from transferring the harassed or the harasser to a different department, to docking the harasser a couple of weeks' pay, to firing the guilty party outright. This fall the Supreme Court will hear Harris v. Forklift Systems, its first sexual harassment case since 1986. The suit was filed by Teresa Harris, who left her job at a Nashville truck-leasing company after months of crude remarks and propositions from the firm's president. The matter was dismissed by a federal judge in Tennessee and ended up in federal appeals court in Cincinnati, where the dismissal was upheld. Reason: Ms. Harris had not proven that she was psychologically damaged by her boss's behavior. If psychological damage becomes the new standard in harassment cases, which is what the high court has agreed to decide, plaintiffs will have a far harder time winning. Says Anne Clark, an attorney for the National Organization of Women: ''You shouldn't have to suffer a nervous breakdown before you can make a claim.'' Lawyers who represent companies reply that a decision in favor of the psychological-damage standard would cut down on frivolous suits. To which working women are apt to say: ''Frivolous? Nobody in her right mind would have her name dragged through the dirt over a frivolous charge!'' No matter how the court rules, managers and employees would do well to keep their own responsibilities in mind. For actual or potential harassers that means: Watch it, buster. For women, it means: Speak up. For their bosses, the best advice is: Get help. Says Susan Crawford, a partner at Holtzmann Wise & Shepard in Palo Alto, California: ''I've found that managers too often are reluctant to refer a complaint to human resources. Instead they try to handle it themselves. But bosses need to see that this is a complicated issue with a lot of pitfalls, and it is not a sign of failure on their part to say, 'Hey, I need help with this. I'm not the expert here.' '' The people in your company who really know where all the pitfalls are -- and who will try to be fair to everybody -- are not in your department. They are probably upstairs somewhere. Call them. For all the seriousness of the issue, it would be a great pity if men and women got to the point of giving up on workplace friendships altogether -- a point some men say privately they've already reached. Remember Rob, Buddy, and Sally on the old Dick Van Dyke Show? Okay, it was way back in the supposedly benighted early Sixties, but those three were a great professional team, and they were pals. For men and women in corporate America, there could be far worse role models. It will be a sad day, if it ever comes, when people are too nervous to ask a pal out for a drink.