The former "Countdown" host also accused the cable network of sabotage and disparagement in court papers filed Thursday, The Hollywood Reporter said.
Olbermann said he was fired without cause and is demanding between $50 million and $70 million in damages.
"This action is necessary as Current has repeatedly and willfully breached its written agreement with Olbermann, often continuing to do so after receiving specific notices to cure such breaches," the entertainment industry trade newspaper reported the complaint said.
Current TV issued a statement to THR calling Olbermann's lawsuit "false and malicious."
"We hope Mr. Olbermann understands that when it comes to the legal process, he is actually required to show up," the network said.
Current TV co-founders Al Gore and Joel Hyatt have said Olbermann was frequently absent from work, refused to promote other Current shows and no longer reflected the values on which the network was established.