Lockheed Martin has agreed to pay approximately $29.5 million to settle federal allegations that the defense contractor used race and sex in employment decisions, including compensation, hiring and promotions. The agreement resolves investigations by the Justice Department and Equal Employment Opportunity Commission (EEOC) involving the company’s workplace diversity practices.
Announced November 3, the settlement includes $22 million to the federal government and approximately $7.5 million in monetary relief for more than 1,000 employees. Federal officials alleged that Lockheed Martin violated employment discrimination laws and falsely certified its compliance with civil rights requirements tied to government contracts.
Central to the investigation was a compensation program introduced in 2021 that provided additional annual pay increases to selected employees. According to the Justice Department, some human resources personnel pressured managers to change employee selections based on race, including removing certain white employees and adding minority employees who had not originally been nominated. Federal investigators also alleged that demographic considerations influenced some hiring, promotion and professional development opportunities.
The Justice Department’s portion of the settlement also resolves claims brought by former Lockheed Martin vice president Tim Booher under the False Claims Act’s whistleblower provisions. Booher will receive $4.4 million from the federal recovery. The EEOC agreement requires the company to maintain employment practices consistent with federal anti-discrimination law and permits the agency to review its compliance.
Lockheed Martin denied wrongdoing and said it had already discontinued the programs involved in the allegations. The company said it agreed to settle to avoid prolonged litigation and associated costs. Federal officials emphasized that the settlement resolves allegations rather than establishing legal liability.
The agreement is part of a broader federal effort to examine diversity, equity and inclusion practices among government contractors. Similar settlements involving other major companies have placed increased attention on how employers structure compensation programs, advancement opportunities and compliance with federal contracting requirements.
