Recovering occurs in NECRA or User Created Safehouses. When you recover, your fear and fatigue goes down. To recover, you have to stay in a safehouse for a certain amount of time, in which you press the "Recover" button during. This also ties in with health recovery, which also happens every 4 hours.
Before leaving an area, it is reccomended that you keep at least one person in the safehouse so that if other characters die, you still have the people in the safehouse. By then, you should be able to considerably recover them.Edit
If you are stuck in a red zone, go to a nearby safehouse to stay. Logout, and when you turn back in, you will possibly be able to recover (if you spent a certain time out of the game).