Just days after more than 40 former Caterham employees announced they would sue the team, the Leafield squad have launched their own legal action.
A legal representative for the employees revealed last week that they are taking action as "they were sacked without consultation in breach of employment law and are claiming breach of contract and unfair dismissal".
The team have now hit back and launched their own legal proceedings saying: "Caterham F1 Team has read with great concern recent reports about a group of individuals who are claiming unfair dismissal from the Formula 1 team following its takeover by new owners.
"The team is now taking legal action against those parties representing the individuals concerned, and each person involved, seeking compensation for the damages suffered by the team due to the gross misrepresentation of the facts made by all those concerned."
The employees' dismissals came not long after Caterham were bought out by a Swiss-Middle Eastern consortium and were forced to let the staff go as part of a "necessary step taken by the new owners of Caterham F1 Team whose priority is the future of the team".
"These claims include the statement that they have been released from Caterham F1 Team - this is incorrect," the team statement added.
"Caterham F1 Team's staff are employed by a company that is a supplier to the company that holds its F1 licence, the licence that allows it to compete in the Formula 1 World Championship.
"Additionally, the team has read claims that it's staff were not paid in July - again, this is wholly untrue.
"Every individual currently employed by Caterham F1 Team was paid their July salary in full on 25th July, one week before it is formally due on the last day of the month, in this case 31st July.
"A formal request for the withdrawal of the relevant press statement issued on 28th July has been made by Caterham F1 Team and the team will vigorously pursue its action against all those concerned.
"However, it will not allow its core focus to be distracted from achieving tenth place in the 2014 Formula 1 World Championship, and building for the 2015 campaign and beyond."