Not knowing your exact situation, I would consider preempting her and going to all your clients (first to any that she hasn't contacted yet), and tell them as professionally that you can, what is happening. People tend to believe the first thing they hear. If it's her bad mouthing you, they will likely lean her direction. If you go in and remind them that they get good service from you and you take care of things, then they'll probably tend more to stay. Consider being ready to cut prices though. This can often turn into a price game so I would start to think up ideas. For clients that she's already visited, try to meet face-to-face with them and give a statement like 'If I drop my prices x%, can you promise me that I can depend on your continued dedication?' Or something like that. In the end, get them to make you a personal promise so if your wife goes back to them again, they would feel guilty about switching. I'm not an attorney so this isn't legal advice but I would consider if she may have physically taken a client list or sales data with her. If something were physically taken from the business that includes data, that may be very different than if everything were in her head. I would at least talk to an attorney. I think any good one would give you 15 minutes of free time to guide you down the right path. Good luck. I hope it works out well for you.

You need to talk with an attorney. If she didn't sign a confidentiality and/or non-compete agreement, you may have a problem. However, your attorney should be able to order her to cease and desist, particluarly if her actions are libelous.