I wanted to thank everyone that has helped me along the way, especially JGT for your guidance.
I wanted to update the forum with the resolution to the issue.
In the end the disconnect was not a result of the SCO Openserver 6 server but was the McAfee Total Protection on the clients computers.
This was only found after doing wireshark packet captures which showed that there were several retransmit packet errors just before the disconnect.
These re-transmits showed that the communication toward the client computer was not getting through.
After checking the security history of the McAfee firewall there were entries that the McAfee firewall was seeing the telnet session as an unwanted connection even though the client computer had initiated the connection and the firewall allowed it through.
It appears that after a period of inactivity the McAfee Firewall would close the socket.
I have not found a setting in the McAfee to disallow this. The telent client is an allowed program in the McAfee Firewall as well.
In the end I needed to add the server IP address (which is in the same subnet as all of the client computers, no router of any kind in between the client computers and the server) into the Firewall as allowed on all ports. Since adding in this exception there has not been a disconnect to the users.
Again thank you for all of the assistance on this issue.