In the lawsuit
, filed in the Centre County Court of Common Pleas, McQueary also contends the university defamed him and that officials lied to him.
McQueary told authorities he witnessed Sandusky anally raping a child in the locker room showers on campus in February 2001, testimony that made the coach a star witness for the prosecution in the case.
Sandusky, 68, was convicted in June 2012 on 45 counts of sexually abusing 10 children over 15 years while he was an assistant football coach, including four counts related to the incident McQueary saw. McQueary was the sole eyewitness to the abuse, The Morning Call
But while he helped convict Sandusky, he was widely criticized in the media and in the court of public opinion for not reporting the "illegal sexual conduct" to the police.
Instead, McQueary "walked away and called . . . his dad," The Washington Post
reported at the time.
According to McQueary, prior to this time he had not received any training from Penn State, "its employees or agents with respect to police requirements for reporting sexual misconduct," the suit says.
He testified to the investigating grand jury that the next day, he and his dad told then-head coach Joe Paterno, and later two university administrators, retired vice president Gary Schultz and athletic director Tim Curley.
The grand jury investigating the case reported that Schultz and Curley contradicted McQueary when they testified that the incident McQueary witnessed between Sandusky and the boy was not serious and that they appeared to be "horsing around."
The suit claims Curley and Schultz misrepresented themselves when they told McQueary, then a graduate assistant coach, that they would properly investigate his report. They also never went to police.
In the suit, McQueary said the university cast him as a "liar" and made him a "scapegoat" when then-President Graham Spanier pledged his "unconditional support" of Schultz and Curley in a statement following their arrest in November 2011.
Following the arrest of Sandusky, Schultz and Curley, McQueary was told to leave town for the weekend and then later was suspended with pay.
When asked if he had been negligent in his duties, university general counsel Cynthia Baldwin replied: "No one is accusing you of being negligent at all," according to the suit.
But McQueary was barred from coaching for the remainder of the season and lost many of the privileges that came with his job, including use of a car and a bonus when the team qualified for a bowl game. His base salary last year was $140,000.
His lawsuit claims he was the only assistant football coach who was not offered an interview to remain on the coaching staff after Paterno was fired last November and new head coach Bill O'Brien took over.
Additionally, the suit claims, McQueary was kept in the dark about his employment status until July 5, the day he learned he had been terminated in a news conference delivered by new Penn State president Rodney Erickson.
According to the Morning Call, his severance benefits were delayed until September and he is the only Penn State employee involved in the Sandusky scandal whose legal expenses have not been reimbursed.
McQueary called this treatment "discriminatory" and alleged it stemmed from his testimony against Sandusky and because he expected to be "a key prosecution witness" against Curley and Schultz, according to the suit.
Being barred from his coaching duties led him to be "ostracized and isolated" and caused him "distress, anxiety and embarrassment," the suit states.
He is seeking $4 million in projected lost salary; back pay for the Sandusky trial; 2011 bowl game bonuses; compensation for losing his university-provided car; repayment for early withdrawals from his retirement account, plus reimbursement for legal fees and other benefits he lost when he was suspended from his coaching job, the Pittsburgh Post-Gazette
McQueary would not comment on the whistle-blower suit, which was filed this afternoon, NBC 10 Philadelphia
reports. Neither would Penn State's communications director, David La Torre, who told NBC News the university "won't have a comment."
But La Torre did confirm McQueary's contract ended with the university June 30, Pittsburgh Post-Gazette states.
McQueary, 38, of State College was quarterback of Penn State's football team in the mid-1990s before becoming an assistant coach, the Morning Call said.
Last week, according to USA Today
, a Pennsylvania judge upheld perjury charges against former Penn State vice president Gary Schultz and athletic director Tim Curley, who are accused of lying to the grand jury.
Jury selection for Curley and Schultz's trial is set to begin Jan. 7.