A South Jersey kindergarten teacher who successfully challenged her termination after she reported that two of her 5-year-old students had claimed to engage in "sex play" in the bathroom is now suing the Mullica school district, claiming emotional distress and defamation over the ordeal.

Kelly Mascio, of Egg Harbor, is pursing the lawsuit in federal court. Details of the lawsuit are being reported on for the first time by New Jersey 101.5.

The suit is part of  battle between Mascio and school district officials that began on Sept. 30, 2013, with a headline-grabbing incident that took place in her classroom.

A five-minute 'lapse in accounting'

Mascio found her job in jeopardy after reporting that a boy and girl had emerged from a classroom bathroom claiming they had sex play and had removed some of their clothing.

She says she immediately reported the incident to the school psychologist because the principal was not in the building that day.

The state Department of Youth and Family Services was notified and Mascio was suspended with pay. Both DYFS and the school district conducted investigations and school officials decided to file tenure charges against the 16-year teaching veteran, citing her for conduct unbecoming of a teacher and unprofessional conduct for failing to properly supervise students in her care.

School officials faulted the teacher for not knowing that her two students were missing until she saw the light flickering in the bathroom about five minutes later.

In March 2014, however, a state-appointed arbitrator dismissed the tenure charges against Mascio. The decision allowed her to keep her job and entitled her to almost four months of back pay. According to court records, the arbitrator found that the Mascio's five-minute "lapse in accounting" for the 12 students in her care "did not rise to the level ... of professional misconduct."

The arbitrator added, however, that Mascio was "culpable for her failure to properly supervise two of her students" and she instead was issued a 10 school-day suspension.

The district's initial speculation that Mascio was distracted by her cell phone or social media was also unsubstantiated after Mascio submitted her cell phone for inspection, her lawsuit says.

The backlash and a civil action lawsuit

Although she was able to keep her job, Mascio contends that she suffered anxiety and "severe emotional distress" due to the way she was treated by district officials in the wake of the incident.

In the lawsuit, Mascio claims she was repeatedly harassed by school Superintendent Brenda Harring-Marro. The complaint claims that during meetings with parents, Marro "spread false statements" about the teacher, claiming she "watched children being abused and did nothing about it." The lawsuit claims that Mascio also believes she was "targeted for retaliation and termination" due to her affiliation with the teachers union.

In addition, the teacher claims that she was subjected to intrusive and unnecessary observation while teaching and, for the first time in her career, received negative performance reviews.

Mascio claims that because of the superintendent's actions, parents began to request that she not be their children's teacher. She also says in the suit that the alleged retaliation caused her "severe emotional distress" and damaged her reputation.

Too much time and too little evidence

In its response to the lawsuit, the district argues that Mascio "cannot seek damages from a public body that was justified in seeking discipline." The district also claims that even though the arbitrator did not find that Mascio's dismissal was warranted, the underlying efforts by the district to discipline her "were not baseless."

"Simply because the arbitrator did not impose the level of discipline initially sought by Defendants does not render their actions into a malicious prosecution," according to the school district's motion to dismiss the case filed in U.S. District Court in March.

Attorneys for the district argue that the teacher failed to submit any facts to support her claims of defamation or actual dates on which the alleged defamation took place. The district's motion states that "defamation carries with it a one year statute of limitations," which would have lapsed between September 2013 and Nov. 25, 2015, when the suit was filed.

Attorneys for Mascio and the school district did not return calls seeking comment on the lawsuit. Mascio continues to serve as a kindergarten teacher in Mullica Township, according to the district's staff directory.

Mascio earns $82,615 a year with almost 19 years of experience, state records show.

Toniann Antonelli is a social content producer for NJ 101.5. She can be reached at toniann.antonelli@townsquaremedia.com, or on Twitter @ToniRadio1015.