I have had Rabbonim tell me that people have asked them if their children can still hang out with my kids. I have heard that people are asking whether they can still do business with me because of the loshon hora they have heard about me. (As an aside it's motzei shem ra, not loshon hora).
If your kids truly don't know, start the conversation with them. They will face this issue with people at some point soon. It would be nice for them to know how to be sensitive to anothers adversity. Don't perpetuate to your children what some of you have shown yourselves to be, uneducated and intolerant.