Lockheed Martin Agrees to Pay $29.5M to Resolve Alleged Employment Discrimination Violations
Tuesday, November 3, 2026 - Today, the U.S. Department of Justice and the U.S. Equal Employment Commission (EEOC) announced a two-part settlementagainst Lockheed Martin Corporation, headquartered in Bethesda, Maryland. Lockheed has agreed to pay a total of approximately $29.5 million to resolve allegations relating to employment discrimination and related false certifications of compliance with federal civil rights laws while serving as a federal contractor. This includes $22 million to be paid to the United States pursuant to an agreement with the Justice Department to resolve allegations that Lockheed violated the False Claims Act arising from failures to comply with anti-discrimination requirements in its federal contracts and by discriminating against employees and applicants on the basis of their race or sex. It also includes approximately $7.5 million to be paid to over 1,000 affected Lockheed employees pursuant to a negotiated settlement agreement with the EEOC resolving a 2025 Commissioner’s Charge filed by EEOC Chair Andrea Lucas, which alleged Lockheed violated Title VII of the Civil Rights Act by engaging in race discrimination against white employees, including in performance assessments and in bonus and other compensation decisions. This is the largest class of workers to publicly recover under an EEOC settlement on account of alleged Title VII violations arising from or relating to a DEI program or practices.
Most federal contracts contain a provision that requires contractors to provide equal opportunity to employees and applicants for employment. As a condition to being a federal contractor, the company must certify that it will not discriminate against an employee or applicant for employment because of race or sex and must further certify that it will take steps to ensure that applicants are employed, and employees are treated during employment, “without regard to” race or sex. The Justice Department’s settlement under the False Claims Act resolves allegations that from 2019 to the present, Lockheed falsely certified compliance with these conditions, while engaging in discriminatory race and sex-based employment practices. This resolution follows other recent settlements secured under the Civil Rights Fraud Initiative, which was launched by the Justice Department in May 2025.
“Companies, especially those that do business with the federal government, should not make DEI compensation decisions that prioritize an employee's race over the merit of their work,” said Associate Attorney General Stanley E. Woodward Jr. “This is the Department’s fourth False Claims Act settlement resolving allegations of racial discrimination against employees. The Department remains steadfast in its commitment to eliminating woke, unconstitutional practices from workplaces of companies that receive federal taxpayer funds.”
“Federal contractors must certify that they will make employment decisions—including decisions on how to compensate their hard-working employees—without regard to race or sex, and putting a thumb on the scale in hiring, promotion, and compensation decisions based on race flies in the face of that requirement,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “Today’s resolution, just like the other recent settlements, protects the employees of federal contractors from unlawful discrimination and will hold federal contractors accountable for not following the law.”
“Companies that receive taxpayer money from government contracts must play by the rules,” said U.S. Attorney Ryan Raybould for the Northern District of Texas. “It’s as simple as that, and this settlement is further proof of this Administration’s commitment to ensuring that employees of government contractors always get a fair shake when it comes to hiring, pay, and promotion decisions.”
The United States alleged that Lockheed took race into account when making compensation decisions for Lockheed employees. Starting in 2021, Lockheed operated an incentive program called “Compensation Adder” or “Comp Adder” that awarded the top 20% of Lockheed’s employees within each business area of the company with an additional pay increase over the annual company-wide increase each year. Managers were initially instructed to use merit-based performance criteria to make their Comp Adder nominations and higher-level leaders reviewed and revised the nominations to ensure that the 20% cap was not exceeded. The United States alleged that prior to finalizing the Comp Adder selections, Lockheed performed a statistical analysis to “flag” statistical outliers based on the race and sex composition of the Comp Adder list. When a business group’s selections were flagged, human resource personnel were supposed to reach out to business group leaders and ask them to re-review their selections and the merit-based basis for the selections, without asking them to take any protected characteristic into account.
In practice, the United States alleged that some Lockheed HR personnel exerted pressure on leaders in their business group to resolve race-related “flags” by directing them to add or remove particular employees based on race. Those Lockheed HR personnel encouraged their business group leaders to remove certain non-minority employees from the Comp Adder selections while adding minority employees who had not been initially nominated for Comp Adder. One HR employee explained to business group leaders that “increasing POC [People of Color] for Comp Adder will result in removing equal count of non-minority.” When an initial re-review failed to identify sufficient minority employees for selection to Comp Adder, certain business group leaders were instructed to perform additional re-reviews (in one example, a business unit leader was instructed “again to reevaluate POC and their performance”) until enough changes were made to resolve the “flags.” A Director of Global Diversity & Inclusion informed HR personnel that “we will identify at least 11 additional PoC adds from other functions” to add to the Comp Adder list “and the level 2 Race flag will clear (assuming everything else remains static). Let’s goooooooooo 😊.”
The United States also alleged that Lockheed took race or sex into account when making hiring and promotion decisions, including, to achieve progress towards non-public race and sex-based workforce composition goals for business units (closely held within the company). The goals were intended to impact Lockheed’s promotion and hiring decisions.
The United States alleged that Lockheed developed a Management Incentive Compensation Plan that contained “quantitative measures called Performance Metrics that are developed and tracked throughout the year.” One Performance Metric was based on achievement of specified goals for preferred demographics. Business units within Lockheed received quarterly summaries tracking the demographic goals within the unit for “women” and “minorities,” where representation or advancement towards the goal was highlighted in green, yellow, or red depending on whether the goal was “met,” “not met but w/in 1,” or “not met.” In addition, the United States alleged that in 2023, Lockheed’s Global Diversity & Inclusion, and Equity & Compliance offices set additional company-wide hiring goals characterized as “aspirational plus” goals that “stretch[] beyond what’s potentially achievable.” In certain business units, Lockheed achieved these “aspirational plus” goals for people of color.
Finally, the United States alleged that Lockheed offered certain training, mentoring, and leadership development programs, and/or similar opportunities to eligible employees on the basis of race or sex, for example, an Executive Leadership Diversity Mentoring program. These programs were designed to boost the career prospects of these individuals over others through sponsorship and networking.
The Justice Department’s civil settlement also includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Tim Booher, a former Vice President at Lockheed. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States ex rel. Tim Booher v. Lockheed Martin Corporation(No. 4:25-cv-00769-P). Under this resolution, Mr. Booher will receive $4,400,000.
The resolution announced today also includes a settlement between the U.S. Equal Employment Opportunity Commission and Lockheed of claims under Title VII of the Civil Rights Act, arising from similar alleged conduct as asserted by the Department of Justice in its False Claims Act investigation. Title VII bars employers from taking any employment action motivated, in whole or in part, by race. Under its statutory authorities, the EEOC can recover monetary relief for individual employees and applicants who have been harmed by violations, including compensatory damages, backpay, front pay, and punitive damages, where warranted, in addition to equitable relief. Lockheed is settling with EEOC to resolve a Commissioner’s Charge alleging that Lockheed discriminated based on race against employees in performance assessments and in bonus and other compensation decisions, including via the Compensation Adder program. EEOC’s settlement provides over $7.5 million of monetary relief for over 1,000 Lockheed employees. As part of the resolution here, in addition to monetary relief, the EEOC’s agreement requires Lockheed Martin to comply with Title VII and Executive Order 14151 and to maintain a merit-based workplace in which race and sex are not considered in hiring, compensation, bonus, or promotion decisions. The EEOC may review the company’s compliance over the term of the agreement.
“Title VII requires employers to treat employees as individuals, ensuring that workplace opportunities, compensation, and rewards are not allocated based on race or sex. The resolution reflects a core EEOC enforcement priority: identifying and remedying unlawful race and sex discrimination carried out by employers under the euphemism of diversity, equity, and inclusion. Title VII protects every worker from employment discrimination on the basis of race — and that protection does not yield when discriminatory decisions are framed as diversity initiatives,” said EEOC Chair Andrea Lucas. “This settlement doesn’t just reinforce that principle, it delivers meaningful monetary relief to more than a thousand workers allegedly affected.”
The EEOC is the sole federal agency authorized to investigate and litigate against businesses and other private sector employers for violations of federal laws prohibiting employment discrimination, including Title VII. To pursue a Title VII claim, employees and applicants first must file a charge of discrimination with the EEOC. The Justice Department’s Civil Division is responsible for enforcing the False Claims Act, which is the government’s primary enforcement tool for recovering losses due to fraud or false statements, including from a failure to comply with anti-discrimination laws and requirements.
Lockheed cooperated in the resolution of these matters.
This year the Administration launched the Task Force to Eliminate Fraud and the National Fraud Enforcement Division to enhance the Administration’s war on fraud, waste and abuse in federal programs. When unscrupulous actors exploit these programs for their own financial gain, they defraud the government, harm the people these programs are designed to aid and protect, and undermine American businesses that play by the rules. The Justice Department Civil Division’s FCA enforcement plays a critical role in combatting such fraudulent schemes, recovering billions of dollars for American taxpayers, and holding wrongdoers accountable. FCA matters will continue to be on the forefront of the battle against fraud, and the Civil Division’s FCA work will support and advance the mission of the Task Force to Eliminate Fraud and the National Fraud Enforcement Division.
The two-part resolution obtained in this matter was the result of a coordinated effort between the Equal Employment Opportunity Commission, the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Northern District of Texas with investigative assistance from the Department of War, Office of Inspector General.
The claims resolved by the United States Department of Justice and United States Equal Employment Opportunity Commission in the settlement are allegations only and there has been no determination of liability.
U.S. Department of Justice
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Source: Justice.gov
