When your child is being dominated by another child, it's definitely important to take action.
In my case, my daughter started a new school when she was in Second Grade. There was a girl who adored my daughter and wanted to be her only friend. When my daughter started making other friends, she wasn't happy about it. I don't blame her. She's only seven years old. She doesn't have the tools to deal with her jealousy, but she made my daughter's life quite miserable. She would threaten her if she wanted to play with other children.
So we sat down and talked to our eldest daughter and said, "Look, you have a voice and you need to be able to speak your feelings. Don't be afraid of your feelings. Tell your friend that you like her a lot, but you have other friends." We tried to give her a voice. We tried to empower her and tried to let her know that she is not a victim.
I also sat down with the child's mother and we decided that the four of us should sit down and talk to get it out in the open, which we did as well. Lastly, when it came time for the following year, I made sure that the two girls were in different classrooms. It's been great. They are now friends. The whole jealousy thing just trickled away and now, they can enjoy each other's company.