Lockheed Martin has agreed to pay $29.5 million to settle federal allegations that it discriminated against white employees through diversity, equity, and inclusion (DEI) practices that influenced pay, hiring and promotion decisions at the defense contractor.
The Justice Department announced the agreements on November 3, 2026, including $22 million to resolve allegations that Lockheed falsely certified compliance with antidiscrimination requirements in federal contracts. A separate $7.5 million settlement with the Equal Employment Opportunity Commission (EEOC) will provide compensation to more than 1,000 workers who allegedly experienced racial discrimination.
Federal investigators accused Lockheed of pressuring managers to replace nonminority employees selected for merit-based raises with minority workers to meet internal diversity targets. The allegations focused partly on a compensation program introduced in 2021 that awarded additional salary increases to the top 20% of employees within each business area.
Managers initially nominated workers based on performance, but the company later reviewed those selections for racial and gender disparities. According to the Justice Department, some human resources personnel pressured managers to change their nominations when internal reviews flagged racial imbalances.
One human resources employee explained in an internal communication that increasing the number of people of color receiving raises would require removing an equal number of nonminority employees. Investigators said some managers were instructed to repeat their evaluations until their selections satisfied the company's demographic targets.
The Justice Department also alleged that Lockheed considered race or sex when establishing hiring and promotion goals, tied management incentives to workforce demographics and offered certain mentoring and leadership development opportunities based on employees' protected characteristics.
Business units received quarterly assessments measuring progress toward diversity objectives. In 2023, the company established additional hiring targets intended to increase minority representation, including goals that officials described internally as stretching beyond what might be achievable.
The federal investigation also involved a whistleblower lawsuit filed by Tim Booher, a former Lockheed vice president, who accused the company of receiving government contract payments while falsely certifying compliance with employment discrimination requirements.
Booher filed the lawsuit in July 2025 under the False Claims Act, which allows individuals to bring claims on behalf of the federal government involving allegedly improper payments. He will receive $4.4 million from the federal recovery.
The Justice Department alleged that Lockheed's discriminatory practices extended back to 2019, two years before the compensation program began. Federal contractors must certify compliance with employment discrimination requirements, including those under Title VII of the Civil Rights Act of 1964, which prohibits employment decisions based on race, sex and other protected characteristics.
The separate EEOC agreement resolves a 2025 discrimination charge filed by agency Chair Andrea Lucas, who alleged that Lockheed disadvantaged white workers in performance assessments, bonuses and other compensation decisions.
Lockheed denied wrongdoing and said it agreed to settle to avoid prolonged litigation. The company maintained that the allegations involved past practices and that resolving the matter would allow it to remain focused on its national security work. Neither settlement includes an admission or judicial finding of liability.
The agreements are part of the Justice Department's Civil Rights Fraud Initiative, launched in May 2025 to investigate whether federal contractors and funding recipients falsely certified compliance with civil rights requirements. Similar enforcement actions have resulted in settlements involving Deloitte, IBM and Accenture.
As part of the resolution, Lockheed must maintain employment practices that comply with federal antidiscrimination requirements, including merit-based hiring, compensation and promotion decisions. The EEOC may review the company's compliance throughout the settlement period.
