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Kleiner partner sues firm for discrimination

May 22 (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.”

TechCrunch first reported the lawsuit.

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.

Pao is on the boards of Lehigh Technologies, Datameer and Flipboard. Before joining Kleiner, she worked at BEA Systems and Tellme Networks.

Pao married African-American money manager Buddy Fletcher in 2007. Fletcher sued his former firm, Kidder Peabody, for race discrimination in 1991 and eventually won a settlement.

Kleiner Perkins, founded in 1972, has backed firms including Inc, Electronic Arts Inc, Genentech, Netscape, Sun Microsytems, and Zynga Inc.