Hakob Manoukian, who began working for Lopez and her ex-husband Marc Anthony in 2005, filed a suit in April alleging that he was humiliated by Lopez's manager Benny Medina and was demoted at Medina's request.
However, Lopez has now countersued the driver for extortion and defamation, E! Online reports.
The former American Idol judge claims in court documents that Manoukian threatened to release "disruptive and potentially damaging" details and "sensitive and personal information that he had allegedly overheard" about her unless she paid him $2.8m (£1.79m).
Lopez claims that Manoukian signed a confidentiality agreement to work for her. She also denies the allegations that he was treated poorly by Medina and not paid the agreed salary.
The singer adds that Manoukian became "hostile and angry" towards Medina after a disagreement and "plotted to retaliate" against him.
"In the furtherance of this plot, he abruptly terminated his employment with Ms Lopez and began to threaten her," the court documents state.
Lopez is now thought to be seeking $20m (£12.8m) in damages for "irreparable injury", in addition to exemplary and punitive damages, court costs and "injunctive relief" to stop Manoukian from harassing her further.
Earlier this month, reports claimed that Lopez and her partner Casper Smart - who are said to be "cooling" their romance - were planning to sue over a claim that Smart attended a 'gay sex club'.