Her manager sounds like a real piece of work. But being a jerk is not illegal.
Outside of FMLA, a doctor's note has no force in law. The fact that she has a doctor's note does not grant her any protections. An employer is not required to follow a doctor's notes unless, as I said, FMLA applies.
FMLA applies when ALL of the following are true:
1.) The employee has worked for the employer for no less than 12 months
2.) The employer has no less than 50 employees within 75 miles of the employee's location
3.) The employee has worked for no less than 1,250 hours in the 12 months immediately following her leave
4.) The employee has a serious health condition as defined by the FMLA statute
http://www.dol.gov/DOL/allcfr/esa/Title_29/Part_825/29CFR825.114.htm
If even one of these criteria is not true, FMLA does not apply.
Telling her that "management is watching" is not, IMO, illegal harassment. I'm not 100% certain that it would be enough to be considered illegal harassment even if we were certain FMLA applied.