At my workplace, within minutes of the incident, HR would have started up a dossier on it, begun interviewing all the witnesses, started counseling with you, and that manager would have been fired. Like, within hours of it happening, if not sooner. Because that is just a lawsuit waiting to happen. Unless they apologized & somehow got you to sign a release ... and even then ... whew! No, I'm not in HR, but I witnessed something in the dept. next to mine a couple years ago & now understand what a zero-tolerance policy for sexual harassment means. HR drops in like commandos from a Black Hawk helicopter.

The manager was out of line speaking to you in front of coworkers. That said, it sounds as if she's sorry and knows what she did was wrong. Hopefully she won't do it again to someone else.

If you need the job and you can handle the situation, don't give notice. It's a job and they can be hard to come by. There is nothing you have to do now, whatever the owner does at this point is not up to you.

Even if you were in dress code standards, it's still up to the managers' discretion on whether or not something you're wearing is appropriate. It sucks, and it was like that at my old private high school. You could be wearing something not specifically listed as inappropriate in the dress code, and the administration could still deem it inappropriate at their discretion. I would still ask for the dress code and say that you want to make sure that from now on you always adhere to it and if you have any questions to ask management first.

She didnt handle it right, and it sucks because she is still one of your managers. I don't understand how some people wind up with management positions when they obviously can't handle a simple task like speaking with an employee about dress code. She should have simply spoken with you in private and explained that your top wasn't appropriate for work and given you a warning, and she shouldn't have forced you to change and wear a shirt that was too small. But actions are being taken, so I'd let it sit for now and find a way to always be in dress code.

I totally feel your pain about dress code, I've been confronted before by two of my managers at the same time and I thought my top was appropriate (the fabric was "too casual"). So I said thanks for letting me know, I was thought this top was acceptable and in the future, I'll make sure to ask first if I'm unsure about a certain top. And I did. And the top in question was deemed inappropriate by my manager.