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Santosh Bhardwaj, 45, has accused Dayal of making her work for long hours every day at USD 300 a month, confiscating her passport and making her sleep in a storage closet.
"Many of the allegations contained in the complaint are ill-founded," Russell Rosen, Dayal`s lawyer, said.
"These will be vigorously litigated and defended."
Rosen added that his law firm, Robinson Brog Leinwand Greene Genovese & Gluck P C, had just been retained and that he would have to study the matter thoroughly before commenting further.
Dayal has vehemently denied all these charges including the accusation of asking Bhardwaj for a massage, which she interpreted as a sexual advance.
The top diplomat has said that Bhardwaj left because he did not allow her to do part-time work outside for extra money, which was against visa regulations.
The Ministry of External Affairs has backed Dayal.
"Such actions impede the ability of the individuals in question to discharge their official responsibilities as well as cause untold mental harassment and anguish," Vishnu Prakash, MEA spokesperson, said in June. "They cannot be dismissed lightly."
The US State Department has said the charges against Dayal constitute a law enforcement matter.
