Bill Balderaz has a great post
on fighting bad PR.
Included in his moves are
being proactive
(reaching out to the possible sources of bad PR,
establishing a relationship
before an incident happens)
and then reacting immediately.
These tips apply to employees also.
I always make work buddies aware
that I want to hear any rumors
about me, good or bad
(no shooting the messenger, rather reward her)
and then I go directly to the source,
addressing the situation.