Apparel retailer American Apparel Inc said former Chief Executive Dov Charney sued the company and its chairman Colleen Brown, alleging defamation and mental and emotional distress.
American Apparel said on Wednesday it would "vigorously dispute" the claims.
The lawsuit, filed on Tuesday in California Superior Court, seeks a minimum of $20 million (S$26.5 million) in damages.
The lawsuit is one of several from Charney, who was suspended as CEO last June and dismissed six months later.
Charney also filed a $30 million defamation lawsuit last week against Standard General LP, one of American Apparel's biggest investors.