Hey Emma, welcome to the RB forums!
Unfortunately, Damsel fish are quite territorial towards species of the same genus or fish of similar size and/or shape. There aren't many ways to put a stop to such harassment, other than the obvious removal method. If desired, a separation wall can be purchased to keep each bickering side at bay.
Over time, fish will begin to develop a pecking order in which each falls into a certain numbered slot (metaphorically speaking) and does not mess with any other fish that has a lower number than them. Any fish with a higher number, gets a lower position in the pecking order. Despite their size, Damsel's seem to position themselves higher up on that list than others are without the respect needed to get there, hence the bullying behavior. They push their way to the top, rather than being placed there. Which is exactly why some aquarists find these little buggers fairly unappealing in a FOWLR/Reef system.
I had an aggresive Damsel as well, my solution.. A Coral Beauty Angel.. Now the Damsel is always occupied..
What does your current livestock list look like?