Janel Grant, the former WWE employee, alleges that Mr McMahon trafficked her as a "a pawn to secure talent deals" with prospective wrestlers the company was trying to court.
The suit was filed in the US District Court for the District of Connecticut on Thursday, naming Mr McMahon, and John Laurinaitis, the company's former head of talent relations, as defendants.
Ms Grant is seeking to void a nondisclosure agreement that she reached with Mr McMahon in 2022. He reportedly offered to pay her $3m for signing the NDA, but Ms Grant claims he only paid her $1m and refused to make further payments.
The lawsuit claims Mr McMahon befriended Ms Grant, who lived in his apartment building in 2019. She alleges that Mr McMahon had learned that Ms Grant's parents had died and that she was looking for work.
The suit goes on to claim that Mr McMahon eventually began to pressure Ms Grant into a sexual relationship, according to CNBC.
“When McMahon pushed Ms. Grant for a physical relationship in return for long-promised employment at WWE, she felt trapped in an impossible situation: submitting to McMahon’s sexual demands or facing ruin,” the lawsuit says.
The lawsuit continues, claiming that given "Mr McMahon's omnipotent position at WWE, coercion was inherent in his increasingly depraved sexual demands."
“Specifically, while McMahon was CEO of WWE and Ms. Grant was employed as an entry level coordinator in the legal department, McMahon recruited individuals to have sexual relations with Ms. Grant and/or with the two of them, directed Ms," the lawsuit claims. "Grant to visit Defendant Laurinaitis prior to the start of workdays for sexual encounters, and expected and directed Ms. Grant to engage in sexual activity at the WWE headquarters, even during working hours."
In addition to voiding the NDA, Ms Grant is also alleging violations of the Trafficking Victims Protection Act, of negligence, intentional or negligent infliction of emotional distress, and civil battery.
The Independent has reached out to the WWE and Mr McMahon for comment.
Ms Grant's lawyer said the lawsuit is meant to highlight the abuses Ms Grant allegedly suffered and to hold the company accountable for turning "a blind eye" to her exploitation.
“Today’s complaint seeks to hold accountable two WWE executives who sexually assaulted and trafficked Plaintiff Janel Grant, as well as the organization that facilitated or turned a blind eye to the abuse and then swept it under the rug,” Ann Callis, Ms Grant's lawyer, said in a statement.
Ms Callis described Ms Grant as an "incredibly private and courageous person" who "suffered deeply at the hands of Mr McMahon and Mr Laurinaitis."
“Ms. Grant hopes that her lawsuit will prevent other women from being victimized," Ms Callis said. "The organization is well aware of Mr. McMahon’s history of depraved behavior, and it’s time that they take responsibility for the misconduct of its leadership.”