MEDFORD — A young boy endured three years of sexual harassment at a Catholic school but his parents can't sue because the state's anti-discrimination law doesn't apply to religious institutions, a panel of judges said Wednesday.

While the parents' lawsuit acknowledged that the law exempts religious schools from the school provision of the anti-discrimination law, they argued that the Diocese of Trenton and St. Mary of the Lakes School violated part of the law that prohibits refusing to contract with someone for discriminatory reasons.

But an appellate panel on Wednesday upheld a trial judge's dismissal of the lawsuit, explaining that the school failing to stop harassment is not the same as refusing to contract with someone.

The lawsuit says the boy started getting harassed in fifth grade by two older boys. While not specifically detailing the verbal harassment, the court called it "disturbing, disgusting and deviant" and that it in fact was sexual harassment.

After learning about the harassment, the parents said they contacted the school's principal and several teachers. The parents were told that the bullies had been "counseled" but the school never separated them, the lawsuit says.

As parents learned more about the harassment, they say the school stopped returning communications with them, including phone calls, text messages and e-mails. In an effort to find help, the parents say they reached out to the Trenton Diocese. A monsignor who eventually called them back "reprimanded the parent for interrupting his 'silent retreat,' and asked why the parent had expected to 'hear back from [him]," the appellate decision says.

When the family told the monsignor that they were close to pulling the child out of school, they say the monsignor told them he thought it was "best if you do leave."

On the last day of school, the school's principal called the boy to her office and accused him of "making all this up" and making "a lot of trouble for nothing," the parents alleged.

The diocese argued that the parents' interpretation of the law  would "effectively nullify the exception to places of public accommodation for bona fide religious institutions."

The appellate judges on Wednesday agreed, saying the parents' "strained interpretation" of the law "would render meaningless the explicit exemption for parochial schools."

Deborah L. Mains, an attorney for the parents, told New Jersey 101.5 that she was "disappointed" in the decision, calling it "disingenuous to say that allowing the suit to go forward would render another provision of the law against discrimination meaningless.

"We don't interpret the statute that way and we don't think that the Supreme Court historically has asked the judiciary to interpret the statute in that way."

Mains said because the decision had just been announced, there has been no decision made about whether to pursue a further appeal to the state Supreme Court.

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Contact reporter Adam Hochron at 609-359-5326 or Adam.Hochron@townsquaremedia.com