The recent United States Supreme Court decision in "Franklin v. Gwinnett County Public Schools" highlights the additional risks facing school districts and employees under federal statutes and the common law as a result of sexual misconduct by school employees. The "Franklin" case illustrates that damages could be available to the student and that such damages can be levied against the district and its supervisors as well as the accused teacher. Other court cases are used to illustrate activities that constitute sexual misconduct and subsequent dismissal of the employee by school boards. Discussed next are the several different tests in deciding whether the conduct of an employee involved in sexual misconduct must be remediated. These tests are a single-standard test, a two-standard test, and a multistandard test. Using court cases to illustrate each test, the implications and ramifications are presented. The final section is on rules of evidence and school board hearings. This information covers the hearsay rule, polygraph tests and hypnosis, the exclusionary rule, forensic evidence, and administrative hearings and criminal cases. Conclusions and recommendations are given. (Contains 45 endnotes.) (RR)