Is this harassment?

[mhunt]

I feel that my district manager has been harassing me for about 6 months, although recently it is getting out of hand. I will give a little background into my situation:

I was hired into my company in April 2008. I was then promoted to the Assistant Manager position at a nearby store within the same company in June 2008. The store that I was promoted to closed in November 2008 and I was demoted from full time to part time and again shippped to yet another store in this same company. I was demoted with the promise to be repromoted to my full time position within a month. This did not happen because the position wasn't available. Although, when the position did become available, it was given to the store managers best friend over me. (there are no qualifications that this person has above me, we have degrees in the same field of interest) When the new hire had inquired to my district manager about the reason that I was not being promoted, she was told by the district manager that I am not promotable because I am "mentally unstable." This really hurt me for a number of reasons, first I have nor have ever had any emotional/mental issues. Second, I didn't appreciate the fact that this was being discussed with a co-worker of mine. I want to report this to HR but I have been hesitant because I am afraid I will be terminated.

I would appreciate ANY advice.
Thank you!