BOSTON (Reuters) - A female attorney at General Electric Co. GE.N sued the company on Thursday, claiming that it underpays and underpromotes its women employees.

Jeffrey Immelt, chairman and chief executive of General Electric, leads a discussion with business leaders at an Ecomagination news conference at Universal Studios in Los Angeles, May 24, 2007. A female staff attorney at General Electric Co. sued her employer on Thursday, claiming that it underpays and underpromotes its women employees. REUTERS/Fred Prouser

In papers filed in U.S. District Court in Connecticut, Lorene Schaefer charged GE, the world’s second-largest company by market capitalization, with gender discrimination. The suit also names 13 GE officers and directors, including Chairman and Chief Executive Jeff Immelt.

Her suit, which is seeking class-action status, seeks $500 million in damages for a class of about 1,500 to 1,700 GE women workers, according her attorney, David Sanford of Sanford Wittels & Heisler LP.

“This lawsuit is designed to achieve systemic injunctive relief to change GE’s discriminatory pay and promotions practices and policies,” Schaefer, 43, charged in court papers.

In an e-mail, GE spokesman Gary Sheffer said, “We strongly deny the allegations made by Ms. Schaefer. We will defend against these claims in court.”

Schaefer, a 13-year veteran of the Fairfield, Connecticut-based company, has served as general counsel at GE’s transportation unit, an Erie, Pennsylvania-based business that makes railroad locomotives. GE’s other businesses include commercial lending, aircraft engines, appliances and NBC media.

In an interview, Schaefer said that after two years in her post, GE management in April told her that she was to be demoted and replaced as general counsel of the unit.

Schaefer said GE officials told her they wanted to replace her with a “big time” general counsel, but did not provide specifics as to how that differed from her qualifications.

“I thought about it long and hard, I thought about what I had experienced at the General Electric Company and what women across the corporation had been talking to me and talking to each other about for my entire 13-year history at the company, and I decided to hire counsel,” Schaefer said. “It’s not unusual at all. There are many, many women who have had the same experience as mine.”

After hiring an attorney, Schaefer was placed on paid administrative leave in May.

“All decisions regarding Ms. Schaefer were based on the merits,” GE’s Sheffer said in a phone interview.

He noted that women accounted for 27 of the company’s top 186 employees, classed as “officers,” up from 17 in 2001. He added that GE had 62 women in the next management rank down, the “senior executive band” out of about 400 in total and up from 42 in 2001.

In all, GE employs more than 300,000 people.

GE shares lost 10 cents to $37.63 on the New York Stock Exchange.