Assuming that all we have been told is true (seems to be a few details missing), then call your local bar association for a referral. In most places, the initial consultation will cost only a modest amount, $25-$50 or so. An employer will often use a lawsuit to try to scare an employee who wants to leave, or to prevent them from working with a competitor. Most of the time these suits are baseless, but on the rare occasion they may have some merit. Get an Attorney to go over your contract and give you an opinion. I found myself in a similar situation once - I paid just $25 for the consultation, and the Attorney (after reviewing the contract) said that a suit (in my particular case) would most likely be dismissed out of hand. I took his advice, and my former employer never followed through on their threat.