Prosecutors alleged that the three were mistreating McCallister, mocking her and preventing her from leaving the room.
Defense attorneys said their clients were trying to help a confused and disoriented person get dressed. If there was any misconduct, it did not rise to the level of criminal behavior, they argued.
The decision was left to Kelly, who heard the case and saw the tape last week from the bench in a nonjury trial.
At Thursday's hearing, Paul French, the victim's son-in-law, shook his head when Kelly pronounced the verdict and said the evidence did not prove guilt "beyond a reasonable doubt." French and his two daughters left the courtroom immediately after the proceedings concluded.
Muhammad sobbed uncontrollably in the arms of D'Agostino, her attorney.
"The verdict was appropriate," said Joseph Del Sordo, Griffin's attorney.
Mary French, McCallister's daughter, said when reached at home that she was "shocked" at the court's decision.
"I don't understand how that is not criminal behavior," French said.
Spokeswoman Erica Parham, an assistant district attorney, said her office was disappointed.
"We believe we had sufficient evidence to present to the judge," Parham said.
The case garnered considerable media attention at the time. The clips from the 12-minute video showed McCallister as she stood naked from the waist up, with the three employees in the room.
What a family, detectives, and prosecutors saw as criminal behavior, defense attorney Michael J. Malloy did not.
"I can't figured out how they charged her," said Malloy, Traynham's attorney.
The Frenches have filed a civil suit against the Quadrangle and its parent company, Virginia-based Sunrise Senior Living.
In April, the Department of Public Welfare revoked the operating license of Quadrangle. The three accused caregivers were also dismissed from the jobs.
The Quadrangle is now operating with a full license.
Megan Lublin, spokeswoman for Sunrise, said center officials had "cooperated fully with law enforcement."
Contact staff writer Mari A. Schaefer at 610-892-9149, mschaefer@phillynews.com, or @MariSchaefer on Twitter.