I'd walk up to her/his office and discuss the matter with extreme clarity and honesty and without fear of losing the job. I'd talk about my concerns about what I'm feeling after what happened and explain that I was not looking for a job recently (if that's true) and the recruiter did it on its own without my knowledge.
And at the end, I'd explicitly ask if I could address the issue and if we're good. If the answer is yes, even implicitly, then I'd monitor his/her behavior for few days and decide if I actually need to look for a new job.
I'd also contact the recruiter and explain to him/her the trouble that s/he has caused me. And I ask if s/he's willing to make things right?
I don't know which country you're living in, but I'm pretty sure finding a new job is much easier than suing a company. It's also cheaper. Unless you're looking for some kinda personal revenge which I don't think it's worth it.
It's not the end of the world. People are dealing with bad/unreasonable bosses all day long as part of their jobs. Your issue is just a misunderstanding, try to solve it by talking.