HAGERSTOWN, MD., OCT. 9 -- Steve Soborot returned home here in August to a new job and what he hoped would be a new life away from the hubbub of Baltimore.

He went to work for Seija and Lawrence Doolittle, who had just opened a restaurant in this largely blue-collar Western Maryland city of 34,000. He did so well they made him maitre d'hotel and had him tend bar.

Then, rumors started to fly: He was a homosexual. Employes resented his growing authority. Customers began speaking darkly of AIDS.

Within weeks, word spread that Seija's Place had turned into a "queer joint." Patronage, hard enough for a new restaurant to come by, dropped dramatically.

Last weekend, employes demanded that Soborot be fired. The owners refused.

Instead, the owners called it quits, saying homophobia -- fear of homosexuals -- was the clincher. "It reminds me of the prejudice against blacks in the '50s," said Lawrence Doolittle yesterday, as employes picked up their last paychecks. "This is something we just could not fight."

Soborot, 29, acknowledged his homosexuality in an interview yesterday. He said that, although he has not been tested for AIDS, he does not have the fatal disease that can be transmitted through intimate sexual contact.

"It just shows you how deep the fears are in this society about AIDS," said Urvashi Vaid, public information director for the National Gay and Lesbian Task Force. "If people are afraid of running into gay people, they shouldn't leave their homes because we are all over the place."

As the saga of the restaurant and its maitre d' made its way into the local newspaper and local radio programs, some suggested the restaurant's closing had more to do with poor management than prejudice against homosexuals.

"This is an inexperienced restaurateur who took over a white elephant and failed," said Jeff Prince, spokesman for the National Restaurant Association, after talking to four of the association's eight members here. "They {the owners} blamed the rumors, rather than bad or inexperienced management." He added: "AIDS is not a food-borne disease; you can't get AIDS in a restaurant."

Seija Doolittle, a former instructor in food service at Hagerstown Junior College, and her husband, a former education professor at Shippensburg State University in Pennsylvania, had never owned a restaurant before they opened for business in July.

At first, said Seija Doolittle, "Everything went very, very nicely . . . . We changed it {from a family-style restaurant} to a tablecloth type of place."

Through her hairdresser, she learned that Soborot, who had held a variety of restaurant jobs, was considering coming home from Baltimore and needed work. "I had waitresses who didn't know tables or customers existed," she said. "He was God's gift to me."

Soborot, who says he is a 1981 graduate of St. Mary's College with a degree in psychology, said he decided to return to his home town after he was beaten by four youths upon leaving a gay bar in the Fells Point section of Baltimore. He said they told him, "We don't need fags in our neighborhood to spread AIDS."

"All I wanted to do was move back to my home town where I thought I'd be safer in my own familiar surroundings," he said. "I finally got this opportunity to go back."

He went to work Aug. 24. The Doolittles were so pleased with his performance, they gave him increasing responsibility and rewards, displeasing some other employes. "A gay person came into our midst and was very domineering," said one employe who said she grew to resent his position. "I couldn't cope with his attitude, personality and the whole deal."

Soborot said at first he had no idea what was happening. "I don't act gay," he said. "I don't wear a pink triangle on my collar. I never felt the need or want to broadcast my sexuality to anyone, including other gays."

Some patrons, at least, were pleased with the 150-seat restaurant several blocks from downtown near the city park. "The food was delicious, the service great," said Kim Deitweiler, a secretary in the city personnel department who ate a Friday dinner there. "I'm not planning to go out and get my blood tested or sit up nights worrying about this."

But some other customers reacted differently. Said one waitress, who declined to be identified, "I had some customers say they would not be back because Steve was a homosexual. They said because of AIDS they wouldn't come in because homosexuals were linked with AIDS and they wouldn't take a chance."

The waitress said many of the 28 employes shared the same concern. "Basically, we all agreed he was gay, that he might have AIDS, that we didn't want it and he was costing us money because waitresses rely on tips," she said. "People don't want to be around people who are homosexual just because of AIDS."

After Soborot began mixing drinks as well as running the dining room, weekend receipts plunged from $2,500 to $1,400 a night, the Doolittles said.

"Two weeks ago," he said, "I heard one of the waitresses saying she wouldn't touch the glasses at one table that was occupied by two obvious {homosexuals}. She made a statement about needing rubber gloves to serve them their meal. I said, 'Don't be crazy,' and walked away."

Last Saturday, Soborot said, a waitress cried, telling of employes threatening to quit and customers commenting to waitresses. He said he wrote a letter of resignation and gave it to Seija Doolittle.

"She said, 'I don't work that way, Steve. Nobody's different in my book. I won't take that from you.' "

One waitress who said she was worried about AIDS said, "Steve did do an excellent job. It's just the basic fact of what he was. A couple of the girls are going to get themselves tested" for AIDS.

Yesterday, while Lawrence Doolittle was winding up the business, passing out final checks and dealing with liquor distributors, the phone rang. An anonymous caller asked, "Are you still serving the AIDS buffet?"