There were no grounds to arrest six protesters for the prevention of harm and injury in a row about tree-felling in Sheffield, the police watchdog said.
All six were held between November 2016 and February 2017 under the Trade Union and Labour Relations Act.
They were charged but the criminal cases were discontinued following a Crown Prosecution Service review.
The Independent Office for Police Conduct (IOPC) upheld complaints about the grounds on which arrests were made.
Calvin Payne, Jeremy Peace, Kate Billington, Margaret Mark, Paul Brookes and one other person were arrested.
The IOPC said: "Though we found there was reasonable suspicion that an offence had been committed, the protestors were arrested for the prevention of harm and injury; there were no grounds for this as there was no risk of injury."
It said it had recommended "management action for the three officers who made the arrests".
Solicitor Iftikhar Manzoor, who represented five of them, said his clients believed "they were acting peacefully at all times".
Responding to the IOPC's findings, South Yorkshire Police said no officers were found to have a case to answer for misconduct.
It said: "These findings underline the complexity our officers face in dealing with competing interests, where they often have only a split second to make decisions, which are then examined at length for weeks, or months, not just in terms of their legality but also around wider issues of context."
The protests stem from a dispute which surrounds a 25-year, £2.2bn contract between Sheffield council and Amey.
Amey is due to resurface all Sheffield's roads by 2020. In doing so, it is tasked with maintaining roadside trees.
The council says only street trees that are diseased, damaging or dangerous are being removed.
But protesters say many are felled because their roots are simply in the way of resurfacing methods.