Lockheed Martin pays $29.5 million to end federal discrimination dispute

Lockheed Martin will pay a total of $29.5 million to resolve federal claims that it discriminated against white employees in its internal bonus system. The settlement was announced on Tuesday by the Department of Justice and the Equal Employment Opportunity Commission. The payment breaks down into two distinct components to address different legal violations.

The company will remit $22 million to the U.S. government. This sum resolves claims that Lockheed Martin failed to follow anti-discrimination requirements attached to its federal contracts. A separate $7.5 million payment will go directly to more than 1,000 affected employees. This portion settles a claim that the company violated Title VII of the 1964 Civil Rights Act, a law that bans employment discrimination based on race.

Lockheed Martin issued a statement denying the government’s allegations. The company said it agreed to the settlement to avoid the cost and distraction of a long legal battle. A company spokesperson stated, “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 dispute centers on a merit-based program launched in 2021. The program was designed to give top-performing employees, specifically the top 20 percent, salary increases and promotion opportunities. Managers nominated candidates for these bonuses. The company then analyzed the nominations to identify statistical outliers based on the race and sex of the selected group. If the list raised red flags, managers were asked to review their choices without considering protected characteristics.

The Justice Department argued that the process was not neutral in practice. According to the government, company personnel pressured leaders to fix race-related flags. The department claimed managers were directed to add racial minorities or remove nonminorities from the selection lists. This approach contradicted the stated goal of using merit as the sole basis for selection.

The legal action began when Tim Booher, a former vice president at Lockheed Martin, filed complaints. Booher resigned in May 2023 after he felt he could no longer support the company’s practices. He filed a federal court complaint in October 2025. Under the whistleblower provision of the False Claims Act, the U.S. government will pay Booher $4.4 million for his role in the case. His attorneys called the settlement an amicable conclusion that ensures compliance in federal contracting.

EEOC Chair Andrea Lucas filed a commissioner’s charge against Lockheed Martin in July 2024 after meeting with Booher. Lucas has been a vocal critic of diversity, equity, and inclusion practices. She stated that Title VII protects all workers from racial discrimination, even when decisions are framed as diversity initiatives. The settlement follows similar agreements reached with IBM, Deloitte, and Accenture.

The case reflects a wider trend under the current administration. The government has used the False Claims Act to pressure contractors to change their diversity policies. Civil rights groups have criticized these moves, arguing they target long-standing practices meant to prevent unintentional bias in hiring and promotion.