Facebook moderators under contract are "bombarded" with "thousands of videos, images and livestreamed broadcasts of child sexual abuse, rape, torture, bestiality, beheadings, suicide and murder," the lawsuit said.
"Facebook is ignoring its duty to provide a safe workplace and instead creating a revolving door of contractors who are irreparably traumatized by what they witnessed on the job," Korey Nelson, a lawyer for former Facebook contract employee Selena Scola, said in a statement on Monday.
Facebook in the past has said all of its content reviewers have access to mental health resources, including trained professionals onsite for both individual and group counseling, and they receive full health care benefits.
"We take the support of our content moderators incredibly seriously, ... ensuring that every person reviewing Facebook content is offered psychological support and wellness resources," said Bertie Thomson, director of corporate communications.
More than 7,500 content reviewers work for Facebook, including full-time employees and contractors.
The social network has faced regulatory scrutiny over not doing enough to prevent content like fake news and hate speech on its platform, and CEO Mark Zuckerberg has vowed to step up efforts to counter it through mass hirings and use of artificial intelligence.
Nelson's firm is seeking class-action status for the lawsuit.
Scola worked at Facebook's offices in Menlo Park and Mountain View, California, for nine months from June last year, under a contract through Pro Unlimited Inc, a Florida-based staffing company.
The case is Scola v Facebook Inc and Pro Unlimited Inc, No. 18 CIV0513, filed in Superior Court of the State of California.
(Reporting by Munsif Vengattil and Aakash Jagadeesh Babu in Bengaluru; Editing by Shailesh Kuber and Lisa Shumaker)