Lockheed Martin to pay $29.5M to settle allegations of discrimination against white employees

Lockheed Martin has agreed to pay $29.5 million to settle federal claims that its diversity, equity, and inclusion efforts led to racial discrimination against white employees. The settlement, announced on Nov. 3 by the U.S.

Department of Justice and the Equal Employment Opportunity Commission, includes $22 million for the federal government and about $7.5 million for more than 1,000 affected workers. The case centers on Lockheed Martin’s Compensation Adder program, launched in 2021 to give extra salary increases to the company’s top 20% of employees in each business unit. According to the Justice Department, human resources staff pushed managers to alter their selections based on race and sex.

The Trump administration said the company removed non-minority employees from consideration while adding minority employees to address disparities in bonus decisions. The department also claimed that one HR employee told business leaders that “increasing POC [People of Color] for Comp Adder will result in removing equal count of non-minority.” Lockheed Martin denied the allegations and said it chose to settle to avoid drawn-out 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, according to USA Today.

The government also accused Lockheed Martin of violating the 1863 False Claims Act, which can hold contractors liable for significant damages if they make false claims to the government. While the law is usually used to combat fraud, the Trump administration has used it against companies it believes engaged in discriminatory practices under the banner of diversity. It has also used the statute to pressure federal contractors to abandon diversity, equity, and inclusion initiatives.

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 settlement also requires Lockheed Martin to continue using merit-based employment practices and to comply with Title VII of the 1964 Civil Rights Act, which bars employment discrimination based on race and sex. Lockheed Martin’s agreement follows similar federal settlements involving IBM, Deloitte, and Accenture as President Donald Trump continues his crackdown on workplace diversity programs among major government contractors.

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