Houston attorney Tony Buzbee told FOX 26 that Watson was receiving a massage from a female when the quarterback "went too far."
Buzbee, who originally announced the lawsuit in a Facebook post, did not elaborate further. The station reported that the suit was filed on behalf of a female masseuse.
Watson responded to the lawsuit on social media late Tuesday, saying he looks forward to clearing his name.
"As a result of a social media post by a publicity-seeking plaintiff's lawyer, I recently became aware of a lawsuit that has apparently been filed against me," Watson wrote on Twitter. "I have not yet seen the complaint, but I know this: I have never treated any woman with anything other than the utmost respect."
"The plaintiff's lawyer claims that this isn't about money, but before filing [the] suit he made a baseless six-figure settlement demand, which I quickly rejected. Unlike him, this isn't about money for me - it's about clearing my name, and I look forward to doing that," he continued.
Watson's future with the team that drafted him in 2017 has been a major storyline during the offseason. Houston has been adamant about not trading him, despite the quarterback’s reported desired interest to leave the Texans.
The Texans agreed to a one-year deal with quarterback Tyrod Taylor earlier on Tuesday. Taylor will be looked at as an insurance policy if the team ends up finding a favorable deal for Watson and decides to trade him, ESPN reported.