"I think you and I should have had a sexual relationship a long time ago and then you'd be good and better and I'd be good and better," Ailes allegedly told Carlson last September according to the complaint.
Carlson was a former "Fox & Friends" host, and most recently had hosted "The Real Story with Gretchen Carlson" on Fox News. She was fired on June 23 after 11 years with the network, according to the suit.
"I have strived to empower women and girls throughout my entire career," Carlson said in a statement. "Although this was a difficult step to take, I had to stand up for myself and speak out for all women and the next generation of women in the workplace. I am extremely proud of my accomplishments at Fox News and for keeping our loyal viewers engaged and informed on events and news topics of the day."
Carlson previously wrote about facing sexual harassment earlier in her career for the Huffington Post's blog. She called on people to stop victim blaming, not let sexual harassment hold women back in their careers, and encouraged mandatory sexual harassment training.
"Finally, we have to stop thinking of sexual harassment as only a women's issue," she wrote. "It comes down to how we raise our children, including our sons. It's not enough to tell our daughters to stand up for themselves. Part of putting an end to harassment involves educating boys to be completely accepting of women, both at home and at work, so that harassment becomes a relic of the past."
The Huffington Post also reported that other sources have come forward with allegations of sexual harassment against Ailes.
Ailes responded to the allegations and denied Carlson's claims on Wednesday.
"Gretchen Carlson's allegations are false. This is a retaliatory suit for the network's decision not to renew her contract, which was due to the fact that her disappointingly low ratings were dragging down the afternoon lineup," he said in a statement.
"When Fox News did not commence any negotiations to renew her contract, Ms. Carlson became aware that her career with the network was likely over and conveniently began to pursue a lawsuit. Ironically, FOX News provided her with more on-air opportunities over her 11 year tenure than any other employer in the industry, for which she thanked me in her recent book. This defamatory lawsuit is not only offensive, it is wholly without merit and will be defended vigorously," he said.
Parent company 21st Century Fox issued the following statement: "The Company has seen the allegations against Mr. Ailes and Mr. Doocy. We take these matters seriously. While we have full confidence in Mr. Ailes and Mr. Doocy, who have served the company brilliantly for over two decades, we have commenced an internal review of the matter."
But Carlson's attorneys fired back at the statements from Ailes and Fox, saying that Carlson managed to become the number one cable news show in her time slot in total number of viewers despite being "moved to a challenging time slot and denied support and promotion."
"Ailes' claim that Gretchen Carlson was terminated because of bad ratings is demonstrably false," attorneys Nancy Erika Smith and Martin Hyman said in a statement, adding: "In her book Gretchen told her story while trying to keep her job — knowing that Ailes had to approve what she said."