Lockheed Martin has agreed to pay about $29.5m to resolve US Justice Department and Equal Employment Opportunity Commission (EEOC) discrimination allegations, the department said on 3 November.
The settlement is in two parts: $22m to the United States under the False Claims Act, and about $7.5m to more than 1,000 affected Lockheed employees under an agreement with the EEOC. It resolves allegations of employment discrimination and false certifications of compliance with federal civil rights laws.
Under the False Claims Act agreement, the $22m includes civil penalties, of which $10m is restitution. Lockheed must pay it, with interest at 4% a year from 5 October, within 14 days of the agreement’s effective date.
The agreement is neither an admission of liability by Lockheed nor a concession by the United States that its claims are not well-founded. Lockheed denies that it engaged in the conduct and denies the allegations in the civil action. The Justice Department said the claims are allegations only and there has been no determination of liability.
The False Claims Act part resolves a whistleblower action, United States ex rel. Tim Booher v. Lockheed Martin Corporation (No. 4:25-cv-00769), which Booher, a former vice president at Lockheed, filed in the Northern District of Texas on 10 July 2025.
The United States intervened in part on 28 October. Booher will receive $4,400,000 plus a proportionate share of interest, paid once the government has received the settlement amount.
The agreement reserves certain claims, including any criminal liability, any liability of individuals, and the suspension and debarment rights of federal agencies. Lockheed must identify and repay within 90 days of the effective date any unallowable costs of the matter previously claimed from the government.
The government’s theory is that Lockheed, as a federal contractor, certified compliance with anti-discrimination requirements, including FAR clause 52.222-26, while maintaining practices that discriminated on grounds of race or sex. The Justice Department said the settlement resolves allegations that this occurred from 2019 to the present.
The first alleged practice concerned a pay scheme, the “Compensation Adder”, which from 2021 gave the top 20% of employees in each business area an additional pay increase over the annual company-wide rise.
The United States alleged that Lockheed ran a statistical analysis to “flag” outliers based on the race and sex make-up of the selections, and that some HR personnel pressed leaders to resolve race-related flags by adding or removing particular employees based on race.
One HR employee is alleged to have said that “increasing POC [People of Color] for Comp Adder will result in removing equal count of non-minority.”
The agreement also alleges that race or sex was taken into account in hiring and promotion, including against workforce composition goals, and that some training and mentoring programmes were offered on the basis of race or sex.
The EEOC settlement resolves a 2025 Commissioner’s Charge filed by chair Andrea Lucas. It alleged race discrimination against white employees, including in performance assessments and in bonus and other compensation decisions.
The Justice Department said this is the largest class of workers to publicly recover under an EEOC settlement over alleged Title VII violations relating to a DEI programme or practices.
Beyond the money, the EEOC agreement requires Lockheed 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 compliance over the agreement’s term.
Associate Attorney General Stanley E. Woodward Jr. said it was the department’s fourth False Claims Act settlement resolving allegations of racial discrimination against employees. It follows other settlements under the Civil Rights Fraud Initiative, launched 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,” Woodward said.