It happens from time to time: Unfortunately, you really don’t have many choices once you have reached that point.
First, you have to follow the chain of command, which, of course, means speaking to the person or persons directly over you. Sometimes this helps, but many times it doesn’t. It depends on several things, including whether or not the co-worker in question is close to those higher ups.
If you own your own business, this may mean someone comes to you with this kind of issue. If you don’t yet own your own company, this may be when you consider seeking financial independence.
If you feel that you must seek other employment, you would probably be better off putting out feelers and resumes while you are still in your current position, as opposed to trying to find something once you have left. If you feel led to be your own boss, start researching and planning before fully cutting ties to your present employer.
It can be difficult for some to understand such a predicament if they have never been subjected to a negative work environment. It can be even more difficult to remain in a wretched situation until something better can be secured.
In the end, you are the only person who can gauge your own ability to withstand abuse and still do a good job. There are other offices and other work to be done, even big business dreams to be achieved, but no one else can tell you whether or not to walk away and start over. You have to make that decision on your own.