Defamation of character is a different type of civil action from any sort of employment action. If your reputation is being damaged by your employer's statements, then you may be able to obtain damages for the injuries. However, by itself, this does not give you any special employment rights. It just entitles you to money.
Before you get excited about suing for defamation, please be aware that this is one of the most difficult lawsuits to win -- and you cannot get your attorney's fees and costs of suit reimbursed. So, unless your damages are very large, the litigation costs may overwhelm any recovery, and you may end up winning the case and losing money in the process.
Setting the defamation action aside, you may be able to make a claim that the employer/owner of the business was actually your business partner, because you were paid far less than fair market value for your services, under the expectation that you would be compensated as a partner. This is also a difficult case to prove -- but, if you are successful, then you would be entitled to a share of the business.
You'll need a good lawyer for this sort of case. For a business ltigation attorney referral, see this link.
Hope this helps.
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