Withholding recess is a "no, no".

Physical Activity Used as Punishment and/or Behavior Management

Children and youths have many opportunities to be physically active in the school environment, including physical education class, recess, and before- and after- school programs. However, some schools, teachers and coaches withhold participation or exclude students and athletes from physical activity as a punishment.

Core Issue
The core issue is that administering or withdrawing physical activity as punishment is inappropriate and constitutes an unsound education practice, according to the National Association of Sport and Physical Education. For more on their advisory and to download the position statement go to:

For ideas to withholding recess check out our 60 Alternatives to withholding recess article.

While you're there download the Right To Recess Toolkit for saving recess.