Lockheed Martin settles federal racial discrimination claims for $29.5 million

Lockheed Martin denies allegations as payments go to government and employees

Lockheed Martin has agreed to pay $29.5 million to settle claims by President Donald Trump’s administration that the defense contractor discriminated against white workers through a 2021 employee bonus program. The Justice Department and Equal Employment Opportunity Commission announced the agreement late Tuesday.

The settlement divides the payment between the government and employees. Lockheed Martin will pay $22 million to the U.S. government to resolve claims that it failed to comply with anti-discrimination requirements in its federal contracts. It will pay $7.5 million to more than 1,000 affected employees to resolve an Equal Employment Opportunity Commission investigation into allegations that the company violated Title VII of the 1964 Civil Rights Act, which prohibits employment discrimination based on race.

In a statement, Lockheed Martin denied the government’s allegations but said it “agreed to resolve this matter with the Department of Justice and the Equal Employment Opportunity Commission to avoid the distraction and expense of prolonged litigation.” The company said: “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 case is the latest example of the Trump administration’s use of the 1863 False Claims Act to pressure federal contractors to abandon diversity, equity and inclusion practices. Typically used to police fraud, the law allows contractors that make false claims to the government to face extensive damages. The administration has invoked the statute against companies it alleges used diversity programs to discriminate.

The Justice Department has reached similar settlements with IBM, Deloitte and Accenture. Civil rights groups have criticized the administration’s policies for targeting long-established hiring, promotion and other employment practices aimed at preventing intentional or unintentional discrimination against traditionally marginalized groups. Several groups have filed lawsuits against the administration’s anti-DEI policies.

According to the settlement agreement, Lockheed Martin introduced the program in 2021 to give the top 20% of employees a merit-based salary bump and promotion opportunities. Managers submitted nominations, and the company then ran an analysis to “flag” statistical outliers based on the race and sex composition of the list. If a nomination list raised flags, managers were asked to review their nominations and the “merit-based basis for the selections, without asking them to take any protected characteristic into account.”

According to the Justice Department, Lockheed Martin personnel “exerted pressure on leaders in their business group to resolve race-related ‘flags’ by directing them to add or remove particular employees based on race.” The department claimed managers were asked to remove nonminorities from the selections and add racial minorities.

The settlement stems from complaints made by Tim Booher, a former Lockheed Martin vice president who will be paid $4.4 million by the U.S. government under the False Claims Act’s whistleblower provision. In a complaint he filed in federal court in October 2025, Booher said he resigned from Lockheed Martin in May 2023 because he “felt that he could no longer be complicit in LMC’s illegal discrimination.”

In July 2024, Booher said he met with EEOC Commissioner Andrea Lucas to detail his allegations against the company. Lucas, who was elevated to EEOC chair after President Donald Trump took office in January 2025, filed a commissioner’s charge against Lockheed Martin, triggering the EEOC investigation.

Attorneys representing Booher released a statement applauding the “amicable conclusion that avoids prolonged litigation and ensures statutory compliance in federal contracting.”

EEOC Chair Andrea Lucas has publicly urged white men to bring discrimination complaints to the agency and has filed commissioner’s charges against the diversity practices of companies including Nike. In the announcement of the Lockheed Martin settlement, Lucas said: “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.”