The Warren County prosecutor's office said Thursday that its investigation with the Phillipsburg police found no criminal wrongdoing.
The photo, which surfaced online, showed seven white teens wearing Phillipsburg High wrestling attire posing with a black tackling dummy in a Paulsboro wrestling shirt and hanging from a noose. Two of the boys had the hoods on their sweatshirts fixed into points.
Paulsboro and Phillipsburg high schools are longtime wrestling powerhouses and rivals.
Prosecutor Richard T. Burke says his decision was cleared with the state attorney general's office.
The matter is being referred back to Phillipsburg High School authorities.