Current and Olbermann, who hosted his program "Countdown" on the network, have been locked in a war of words and legal filings since last week, when Current fired the commentator claiming he had breached his contract.
The liberal firebrand sued the network on Thursday seeking as much as $70 million he says he is owed for compensation and an equity stake he was given in the fledgling network.
Current is run by its founder Joel Hyatt and former U.S. Vice President Al Gore.
In his suit, Olbermann launched a scathing attack on Hyatt and Gore, saying the network was plagued with problems and comparing it to "an unprofessional cable-access show."
In its counter-suit filed on Friday in Los Angeles Superior Court, Current attorneys fired back, claiming Olbermann "willfully" failed to show up for work and did not help create new programming or promote the network as he'd agreed to do when taking the job roughly a year ago.
"Current seeks a determination that it is no longer obligated to pay a dime to Mr. Olbermann who, having already been paid handsomely for showing up sporadically and utterly failing to keep his end of the bargain, now seeks to be paid tens of millions more for not working at all," the network's attorneys wrote in their suit.
Among the key allegations Current cites is that Olbermann took unauthorized vacation time - the network said he worked only 19 of 41 business days in January and February - and refused to work on Current's U.S. presidential caucus and primary election coverage as he was asked to do.
Current claims it first notified Olbermann he was in breach of contract back in October of 2011, but problems persisted.
Olbermann joined Current in February 2011 after quitting his top-rated program on MSNBC, "Countdown with Keith Olbermann," a month earlier for reasons that have never been disclosed.
He was appointed chief news officer at Current, took an equity stake in the channel that was originally launched in 2005, and became its biggest celebrity draw.
But his nightly show attracted only an average 177,000 viewers - a fraction of the audience who watched him on MSNBC.
(Reporting By Bob Tourtellotte; editing by Todd Eastham)