Ryanair and long-time chief executive Michael O'Leary is being sued in New York by a shareholder.
The action said Europe's largest airline defrauded investors and inflated its share price by overstating its ability to manage staff relations and keep costs down.
The complaint was filed in the US District Court in Manhattan by an Alabama pension fund, seeking class-action status and damages for investors in Ryanair's American depositary shares from May 30, 2017, to September 28, 2018. Ryanair did not immediately respond to requests for comment yesterday.
The complaint said Ryanair misled investors in regulatory filings and conference calls about its labour stability, including "industry leading" contracts with pilots and cabin crews, and its positive impact on operations.
It said the truth came out as staff unrest forced the Dublin-based low-cost carrier to recognise unions for the first time last December, and led this summer to costly strikes that stranded thousands of passengers in several countries.
"Unbeknownst to investors, the company's historical profit growth was built on an undisclosed and unsustainable foundation of worker exploitation and employee turnover," the complaint said.
"The decline in the price of Ryanair ADSs was the direct result of the nature and extent of defendants' fraud finally being revealed to investors and the market."
Ryanair cited labour issues on October 1 when it cut its full-year profit forecast. Its share price closed that day more than one-third below its level in mid-March.
Mr O'Leary, Ryanair's chief executive since 1994, said last month that he hoped to reach agreements with all of the carrier's major unions before Christmas.
The lawsuit was filed by the City of Birmingham Firemen's and Policemen's Supplemental Pension System.
Its law firm, Robbins Geller Rudman and Dowd, specialises in securities fraud.
It is common for shareholders to sue companies in the US after what they consider to be unexpected share price drops.
In a statement today Ryanair said that it had not received any such documentation.
"However these claims are doomed to fail as they have no basis in fact or reality. Ryanair shares are one of the best performing airline shares in 2018, despite significantly higher oil prices and lower fares which are affecting all EU airlines."
"Contrary to these invented claims, Ryanair has experienced very little industrial action this year from its staff. Over just eight days (five days of action by just 25pc of Irish pilots, and three days of action by less than 25pc of cabin crew and pilots across five other EU countries) Ryanair continued to operate more than 90pc of its published schedule with minimal customer disruptions."
"Most of Ryanair’s flight disruptions (like all other EU airlines) this year were caused by ATC strikes and staff shortages, mainly in France, Germany and the UK, which are an industry problem afflicting all EU airlines and their passengers.
"Ryanair will vigorously defend and defeat these bogus ‘ambulance chaser’ claims."