Tue., May 22, 2012 3:55pm EDT (Reuters) — Kleiner Perkins Caufield & Byers partner Ellen Pao is suing the venture capital firm for sexual harassment and discrimination, according to a lawsuit filed earlier this month in California Superior Court.

Pao, who joined the firm in 2005, alleges that former Kleiner partner Ajit Nazre made sexual advances to her and worked to harm her career once she rebuffed him. Nazre didn't return a call requesting comment.

She also alleges that the firm engaged in systematic discrimination against women, for example, allowing female junior partners fewer board seats and investment sponsorships compared to male junior partners, and allocating women a smaller percentage of profits.

"The firm regrets that the situation is being litigated publicly and had hoped the two parties could have reached resolution, particularly given Pao's seven-year history with the firm," said Kleiner spokeswoman Christina Lee. "Following a thorough independent investigation of the facts, the firm believes the lawsuit is without merit and intends to vigorously defend the matter."

Venture capital is a clubby, male-dominated world, but sexual harassment lawsuits are rare.

Pao said when she complained to senior partners about the inappropriate behavior, including Nazre's failure to include her in meetings and on email chains, they reacted in a way she found unsatisfactory. For example, managing partner Ray Lane suggested she marry Nazre; the firm also asked her to move to the China office.

Pao also said partner Randy Komisar had engaged in inappropriate behavior, including giving her an inscribed copy of Leonard Cohen's "The Book of Longing" one Valentine's Day. The book contains poetry with sexual content.

Last year, partners at the firm organized two all-male dinners for select partners, executives at Kleiner-funded companies, and a few other guests. One of the partners, Chi-Hua Chien, said women were excluded because they would "kill the buzz," according to the lawsuit.

Lee said Kleiner was one of the first venture capital firms to hire women as partners. "The number of women partners at the firm is one of the highest within the venture capital arena and the firm has actively supported women in all respects," she said.

(Reporting By Sarah McBride in San Francisco; Editing by Lisa Von Ahn)

© 2011 Thomson Reuters. Click for Restrictions.

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