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I also do empathize with school officials who are trying to protect themselves from accusations of not taking harassment seriously enough. But really. There's a line, and you can reprimand a kid for being rude without accusing him or her of sexual harassment.
No. There is not a line. That is the problem. There is a whole lot of gray area.
We can complain about this, but the teachers and administrators on the ground know a lot more about what happened than we do. If they said it was harassment or bullying there's probably a reason. Do people get it wrong? Of course. All the time. It sounds as through they got it wrong, realized they got it wrong and changed their decision. To pretend that we know better about these kids and what they did is foolish.