The top-rating provocateur is suing his former employer ARN in the Federal Court, alleging the termination of his contract with the company was invalid because there was no act of serious misconduct.
He also claims the termination breached Australian Consumer Law.
ARN, the parent company of KIIS FM, which previously broadcast Sandilands' show for more than a decade, said on Monday it disputed the claims and would defend them.
Its subsidiary, Commonwealth Broadcasting Corporation, is also named in the lawsuit.
ARN tore up Sandilands' $100 million contract after the shock jock's on-air clash with co-host Jackie "Jackie O" Henderson ended their time together on the long-running show.
The Kyle and Jackie O Show was a consistent ratings hit in Sydney but had failed to gain much traction in its expansion to Melbourne and Brisbane.
The split came after Sandilands slammed his broadcast partner for looking into former prince Andrew Mountbatten-Windsor's horoscope.
"You're off with the fairies ... every segment, every time you've spoken, you don't even know what's going on," Sandilands said to Henderson during the February 20 broadcast.
ARN said Henderson gave notice she could no longer work with her co-host, triggering an early March decision to terminate her $100 million agreement.
Sandilands was suspended on March 3 and issued a breach notice for serious misconduct.
He has consistently denied breaching the terms of his contract.
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