Tipton Green councillor Ian Jones, a former cabinet member, and Wednesbury South councillor Olwen Jones, have had the party whip removed for four months after an internal investigation.
Councillor Bob Lloyd, who represents Wednesbury South, has had the whip removed for three months.
It means all three councillors are barred from participating in Labour group meetings for the period of their suspensions and will not be able to vote in May's annual general meeting.
It follows allegations that they intimidated a pensioner at a meeting of community group Wednesbury Celebrates last summer.
Councillor Steve Eling, the leader of Sandwell Council, said: "The Sandwell Labour group received a complaint regarding allegations of an incident that occurred in Wednesbury last summer.
"It alleged inappropriate conduct on the part of the three members concerned, namely Councillors' Ian Jones, Olwen Jones and Bob Lloyd.
"Our party whips have now reported that the complaint was substantiated and have recommended penalties for each of the councillors.
"I have been saying for a long time that people who are unwilling to behave in the appropriate manner will face sanctions. We are all obliged to abide by the rules."
Mr Jones was previously suspended by the Labour group in February 2015 over allegations relating to the sale of council owned buildings that were later detailed in the Wragge report.
The report, issued in May last year, found he had no case to answer.
He had been reinstated as a member of Sandwell's Labour group in March 2016 after the High Court ruled against his suspension.
Mr Jones, who was a candidate for deputy leader following the death of Darren Cooper, told the Express & Star he and councillors Olwen Jones and Bob Lloyd all planned to appeal against their suspensions.
"This decision was arrived at based on evidence that we all strongly dispute," he said.
"We will be appealing against the decision at the regional board of the Labour Party."