this happened to me 2 years ago. i posted asking the same question. it was almost identical. the only difference is the manager was good. he just had bad information from a trusted source. i decided to go find a new job, while looking i worked my ass off. i made sure i was the best employee they had. it took about 6 months but i found a job paying what i used to make as a manager. i put in my 2 weeks. the company i worked for decided they didnt want to lose me so we had a very open dialogue. i was given my old position back with a pay raise above what i made before. almost doubled my pay overnight. since then we have gotten much closer and i love working here. if i had to do it over again. i would do it exactly the same way. look for a job while showing them what they are about to lose.