In a rare sexual-harassment and discrimination suit by a sitting bank officer, Vermont's largest banking organization is being sued for $2.25 million by a vice president in its trust division.

Susan J. Klein sued Banknorth Group Inc. of Burlington in February in Vermont's Windham Superior Court. She claims that men in the trust department harassed her in the late 1980s, and that she was denied advancement and pay equal to those of her male peers.

David Reville, director of corporate communications, said the company denies all charges but would comment further on the litigation. The bank has filed an answer to the suit calling the accusations false. No trial date has been set.

"The bank is quite proud of its history ... in terms of offering equal opportunity, and believes it will be exonerated in this lawsuit," said Banknorth's Burlington attorney, Patricia M. Sabalis.

Though banking management is overwhelmingly male, anecdotal evidence suggests sexual discrimination lawsuits have been a relatively rare in the industry, observers said. And overt sexual harassment charges are even rarer.

But that could change. The American Bankers Association and the Equal Employment Opportunity Commission did not have data on the extent of such suits against banks.

Ms. Klein, a vice president at Stratevest Group, a $2.5 billion-asset trust and investment unit recently formed by Banknorth, said in her suit that she had experienced sexual harassment at least since 1989, the year after she was hired.

However, her complaint said that "overt" sexual harassment has diminished since May 1993.

The suit alleges "male trust officers showing nude photographs of themselves, male trust officers urinating in full view of female trust officers, male trust officers 'mooning' female trust officers, (and) male trust officers making offensive sexual remarks in the presence of female employees."

Most of Ms. Klein's lawsuit accuses Banknorth of not increasing her salary or title to adequately reflect added responsibilities, while male counterparts received such advancement.

The suit alleges that because of her complaints to the company, Banknorth has tried to demote her and reduce her responsibilities. Ms. Klein called her new title of vice president at Stratevest a "facade"; her responsibilities actually decreased, and her salary did not increase, she said.

The suit also said that Banknorth and Ms. Klein had discussed proposals to "remedy the acts of discrimination," but that none was agreed upon. Banknorth denied this as well.

Don J. Kauth, an analyst with First Albany Corp., in Albany, N.Y., said it's unclear how the lawsuit might affect Banknorth. "In terms of its stock price, it doesn't seem to have had any material impact," since reports about the lawsuit surfaced last week he said.

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