A California student was punished by his teacher for saying "bless you" to a sneezing classmate. The teacher, Steve Cuckovich, says the punishment wasn't about religious beliefs, but about the disruption it caused. The school's principal says he talked with Cuckovich about the punishment. (More of the story here.)
So here's my thoughts on this story. As a teacher I understand classroom disruptions and being consistent and stopping trouble makers in their tracks. But saying, "bless you?" I would just be glad that my students were showing good manners, outdated or not. (Not, if you ask me.) Settle down, Mr. Cuckovich. Ignore it and pass the tissues.