The Situation Lawsuit -- Accused of Hiding Drug Problem From Vodka Company

The Situation was a menace to work with and kept his drug addiction a secret from his employers -- this according to the protein-infused vodka company who just filed a counter-suit against him.

TMZ broke the story ... Sitch filed a suit against Devotion Spirits earlier this month, claiming he helped build their boozy brand as a celeb spokesman. But Sitch claims they reneged on their end of the deal ... which he says cost him $5 million.

The company fired back this week and filed a counter-suit of their own ... claiming the "Jersey Shore" star was the one in breach of contract, for a slew of reasons.

Specifically, Devotion says Sitch constantly showed up late to events, concealed an alleged drug problem, was seen asking investors for weed, refused to do interviews at events and constantly demanded extra perks for his friends.

Not only that, Devotion says at an event in NJ in 2011 ... Sitch locked himself in the bathroom and refused come out. They claim he then emerged "sniffing" -- and later security guards said they found cocaine-like residue. When Devotion approached Sitch's team about the incident, they say his team denied any drug use.

Devotion says they finally terminated their contract with Sitch in March 2012 (the same month he checked into rehab). They are suing for unspecified damages. A judge has yet to rule.

We reached out to Stich's camp, but so far ... no word back.