Lockheed Martin is agreeing to pay $29.5 million to resolve federal allegations that its diversity, equity, and inclusion (DEI) initiatives resulted in racial discrimination against white employees.
The settlement, announced on Nov. 3 by the U.S. Department of Justice (DOJ) and the Equal Employment Opportunity Commission (EEOC), includes $22 million payable to the federal government and approximately $7.5 million designated for more than 1,000 affected employees. The allegations center on Lockheed Martin’s Compensation Adder program, which was introduced in 2021 to reward the company’s
top 20% of employees in each business area with additional salary increases. According to the Justice Department, human resources personnel pressured managers to adjust their selections based on race and sex. The Trump administration claimed it removed non-minority employees from consideration while adding minority employees to address demographic disparities in bonus selections. The Justice Department also alleged that one human resources employee instructed business leaders that “increasing POC [People of Color] for Comp Adder will result in removing equal count of non-minority.”Lockheed Martin denied the government’s allegations and said it agreed to the settlement to avoid prolonged litigation.
“We did not admit liability, determining it would be best for all involved to put these matters behind us so we can remain focused on our critical national security mission,” the company said in a statement, USA Today reported.
The government also alleged that Lockheed Martin violated the 1863 False Claims Act, which states that contractors that make false claims to the government could be liable for extensive damages. Although it’s typically
used to stop fraud, the Trump administration has invoked the act against companies it believes used discriminatory practices under the guise of promoting diversity. The Trump administration has also used the law to pressure companies with federal contracts into abandoning diversity, equity, and inclusion practices.Tim Booher, a former Lockheed Martin vice president who raised concerns about the company’s practices, will receive $4.4 million under the False Claims Act’s whistleblower provisions. The agreement also requires Lockheed Martin to maintain merit-based employment practices and comply with Title VII of the 1964 Civil Rights Act, which prohibits employment discrimination based on race and sex.
Lockheed Martin’s settlement follows similar federal settlements involving IBM, Deloitte, and Accenture as President Donald Trump continues to crack down on workplace diversity initiatives among major government contractors.
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