The arbitrator found Donna DeMarco was guilty of conduct unbecoming for using the confinement as a means of punishment or behavioral control.
DeMarco was a teacher at Packanack Elementary School in Wayne. Half of her class of 16 students were special needs or had autism.
The teacher testified she used bathroom confinement as a de-escalation technique for two students during the 2015-16 school year.
She also said she referred to the children using derogatory terms in front of colleagues as a means of venting.
DeMarco was hired in 2006 and granted tenure in 2009. Her lawyer declined comment.