Ex-model Kayden Nguyen is suing the Under Siege tough guy for $1 million (£666,000), claiming he used her "like a sex toy" and expected her to pleasure him sexually after landing a job as his executive assistant.
She also alleges that Seagal had two Russian girls "who were available for his sexual needs 24 hours a day, 7 days a week" - and she was expected to replace one of them.
The allegations have thrown the future of Seagal's show, Steven Seagal Lawman, into doubt - after the sheriff who works alongside the actor in the series kicked the film crew out of his office.
Sheriff Newell Normand made an announcement that, in the light of the sexual abuse claims, he could no longer warrant working alongside Seagal.
The show charts Seagal's work as a deputy with the Jefferson Parish Sheriff's Office in Louisiana.
On Tuesday (13Apr10), Seagal's lawyer Marty Singer dismissed Nguyen's claims, stating, "The lawsuit... is a ridiculous and absurd claim by a disgruntled ex-employee who was fired for using illegal narcotics. (The lawsuit) is a complete fabrication without a scintilla of truth."
Singer is confident Seagal's name will be cleared and the case dismissed.