Sycamore Networks Inc. (Nasdaq: SCMR), already under investigation for its stock options history, will "vigorously contest" legal action taken by a former employee whose wrongful dismissal case against the optical vendor includes allegations of stock option back-dating, according to a document filed with the Securities and Exchange Commission (SEC) . (See Options Probe Spreads to Sycamore.)

The document, dated July 10, notes that a former employee has filed a complaint in Massachusetts state court claiming wrongful dismissal, and that the complaint includes allegations that Sycamore engaged in fraudulent and deceptive practices.

The former employee, identified this morning by the Wall Street Journal as former human resources director Stephen Landry, claims he was forced to quit the company in October 2000 and, according to the SEC document, "was induced to not exercise his options as a result of alleged false and misleading statements."

At press time, Light Reading was unable to obtain a copy of the lawsuit. Stay tuned for an update.

Landry's lawsuit also "alleges claims relating to certain of the Company's stock option grant practices in 1999-2001. The complaint seeks lost wages, unspecified monetary damages and reinstatement of medical benefits, among other things."

According to the WSJ, the evidence filed with the court includes an internal company memo that allegedly shows that Sycamore staff discussed ways in which they could manipulate the dates of stock option grants so that they coincided with low share price points. One way to do that, according to the memo, was to consider altering the date an employee joined the company.

Sycamore "believes that it has meritorious defenses to the complaint, intends to vigorously contest this action and intends to file counterclaims, as appropriate," it states in its filing.

Sycamore also disclosed that it has also been named in three separate shareholder lawsuits that allege wrongdoing related to the back-dating of stock options grants. One of the lawsuits also alleges insider dealing by Sycamore executives.

A Sycamore spokesman says it's not the company's policy to comment on matters related to litigation.

The company's stock is down 13 cents, more than 3 percent, at $3.81 in pre-market trading this morning.

Sycamore is just one of a number of companies under investigation for alleged back-dating of stock options. (See Marvell Joins Options Fun, Redback in Options Probe, Foundry, VeriSign in Stock Option Probes, and Feds Call on Juniper.)

— Ray Le Maistre, International News Editor, Light Reading