Defense contractor Lockheed Martin has agreed to pay $29.5 million to settle claims that its diversity initiatives discriminated against white employees. The settlement, announced by the Justice Department and the Equal Employment Opportunity Commission (EEOC), resolves allegations that the company violated anti-discrimination laws through its internal bonus and promotion program.
Under the settlement, Lockheed Martin will pay $22 million to the U.S. government to resolve claims of non-compliance with federal contract anti-discrimination requirements. An additional $7.5 million will be paid to more than 1,000 affected employees as part of a separate settlement with the EEOC, which had investigated the company for violations of Title VII of the Civil Rights Act of 1964. This law prohibits employment discrimination based on race.
Lockheed Martin denied the government's allegations but stated it agreed to the settlement to avoid the "distraction and expense of prolonged litigation." The company added that it did not admit liability and determined it was best for all parties to move past the issues to focus on its national security mission.
The case is one of several instances where the Trump administration used the False Claims Act to challenge diversity, equity, and inclusion (DEI) practices among federal contractors. The law typically addresses fraud but was employed by the administration against companies accused of discriminatory practices under the guise of promoting diversity.
Similar settlements have been reached with companies including IBM, Deloitte, and Accenture. Civil rights organizations have criticized the administration's focus on DEI policies, arguing that these practices are designed to prevent unintentional or intentional discrimination against marginalized groups. Some groups have filed lawsuits challenging these anti-DEI policies.
The allegations against Lockheed Martin stem from a 2021 program that offered merit-based salary increases and promotion opportunities to the top 20% of employees. According to the Justice Department, the company's process involved flagging statistical outliers based on race and sex composition. Managers were reportedly asked to review these selections, and in practice, personnel allegedly pressured leaders to resolve "race-related flags" by directing them to add or remove employees based on race, specifically favoring racial minorities.
The settlement originated from a complaint filed by Tim Booher, a former vice president at Lockheed Martin, who resigned in May 2023, citing his inability to be "complicit in LMC’s illegal discrimination." Booher will receive $4.4 million from the U.S. government under a whistleblower provision of the False Claims Act.
EEOC Commissioner Andrea Lucas, who has been critical of DEI practices, played a role in triggering the EEOC's investigation after meeting with Booher in July 2024. Lucas stated that 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."