Louise Lee in the Wall Street Journal:

Many companies are quite formal about how to be casual. Southland, for example, put on a "fashion show" with employees modeling what is—and isn't—OK to wear on dress-down day. For further reference, the company has compiled a two-inch-thick binder packed with full-color catalog clippings, each pasted into sections marked "appropriate" and "inappropriate." (A photo of a woman wearing black spandex exercise shorts and a tight-fitting tank top fell into the latter category.)

In addition, the Dallas-based convenience-store chain has formed an eight-member "Employee Dress Code Committee" to resolve any future disputes over questionable dress.

Determining what is perfectly casual from what is way too casual can be tricky. At Picadilly Cafeterias Inc., of Baton Rouge, La., bluejeans are forbidden, but not black or green jeans. Shorts are prohibited, so why not the culotte-like "skort," an odd cross between shorts and a skirt? "I don't know how to answer that," confesses Scott Bozzell, a vice president who recently held a special meeting with supervisors to clarify the company's casual-dress rules. "I guess the design of skorts itself isn't distasteful."

For workers at conservative companies, the chance to break free from business suits may be just too much to handle. Houston-based American General Corp. tried a Casual Day Pilot Program, but found "the definition of casual was perceived to be broader" than intended, says John Pluhowski, company spokesman.

On dress-down day, employees of the insurance company wore Santa Claus and Easter Bunny outfits, T-shirts advertising booze and tight pants under oversized baggy shirts hanging to the knees. No one was sent home, not even the worker who dressed as a duck.

"If you came as a duck, you went home as a duck, but you were expected not to return as a duck," Mr. Pluhowski says. After a six-month trial, casual day at American General got the ax.

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