Hi Blue,
I started to pm, but since this is an opinion question, I'll chime in here. I am on both sides of the fence with this one, Blue. As you know I teach fifth grade. Also, we both have identified children. For me, 3 out of 4 have meds/iep's or 504 plans. I teach in the same county but at a different school. It's the largest county in the state, so fortunately, labels don't follow my children.
Your son's teacher acted inappropriately. Children pick up on a teacher's attitude towards other students, and act in the same manner. I don't think that you can show that any laws were broken, however, you should meet with her and the principal to express your thoughts.
I absolutely hate bullying! I was always afraid that other children would find out my circumstances as a child, and now I wear my heart on my sleeve with my own children. None are "popular" in the way that it matters in middle school and high school, but only one has been really bullied by other children, and I never got anywhere with the administration that year. It was awful, but I just tried to reinforce his positive feelings each evening, and kept his brothers on the lookout. One time he was even pushed into a desk so hard that he had bruises, but no adult saw this, and it was claimed to be an accident.
Okay, enough description, I am now in tears for all of our children!
Btw, I hated running the mile, too, and my children inherited that gene!!!
If you can volunteer, I think this will help a lot, and give you peace of mind, as well.
Bluemountains