Slander or defamation....is there anything that can be done?

My sister and my brother's fiance work for the same company but different offices my soon to be sister-in-law, lets call her "Jane", has been forwarding pictures of my sister to fellow employees with statments like "horrible" or other remarks making fun of my sister. "Jane" tells fellow employees that my sister is a drug addict and makes up all kinds of horrible lies. "Jane" has also written many negative things about my sister on her myspace page, belittling my sister and her relationship. Recently "Jane" sent a letter to my sister threatening to get a restrainging order against her; even though my sister has not retaliated or responded to "Jane". Can we sue "Jane" for slander and defamation of character, or if you know of any other legal response please let me know.