The religious education teacher was suspended from Trinity school, Carlisle, in December 2001 after allegedly telling her department head to "piss off" and taking inappropriate lessons, including one in which she instructed her class to draw pictures of a circumcised penis.
The school, led at the time by Mike Gibbons, now head of the Department for Education and Skills' innovation unit, also claimed that she discussed her difficult relationship with senior staff in front of pupils. These allegations are subject to a General Teaching Council for England hearing next month.
Newcastle county court heard this week that Ms Sherry first sought help from NUT officials in 2000, saying she was being bullied and intimidated by her former headteacher. It was claimed that over the course of a two-year dispute with the school, union representatives failed to accompany her to meetings, did not return her phone calls and e-mails and refused to give her proper advice.
In 2002 she reached a compromise agreement with the school and left due to ill health, claiming work-related stress.
Judge Steven Alderson said this week: "The NUT had Miss Sherry over a barrel. They basically told her if she didn't accept their advice then that was it. They washed their hands of her."
After the hearing, Ms Sherry said: "I feel they defrauded me out of subscriptions for 23 years and let me down when I most needed help." She is due to appear before the GTC next month when it will decide if she should be disciplined over the alleged incidents which led to her suspension.
Elaine Kay, the NUT's regional secretary for the North, said: "The union did all it could to support Ms Sherry but she chose to seek legal advice from elsewhere."