Lockheed Martin to Pay $29.5 Million to Settle Federal Claims Over Diversity Programs

Lockheed Martin, the Bethesda, Maryland-based defense contractor, has agreed to pay about $29.5 million to resolve federal claims that its diversity programs discriminated against employees based on race and sex, the Justice Department and the Equal Employment Opportunity Commission said.

The company denies wrongdoing. Under the agreement, there is no finding that Lockheed broke the law, and the government describes its claims as allegations only.

What the settlement covers

The deal has two parts. Lockheed will pay $22 million to the federal government to settle claims under the False Claims Act that it certified it was following anti-discrimination rules in its federal contracts while using race- and sex-based employment practices from 2019 onward. The Justice Department said $10 million of that amount counts as restitution.

Separately, the company will pay roughly $7.5 million to more than 1,000 current and former employees under a settlement with the EEOC. That agency had been investigating a 2025 complaint filed by its chair, Andrea Lucas, alleging race discrimination against white workers in performance reviews, bonuses and pay. The EEOC called it the largest group of workers to publicly recover money in a settlement tied to a diversity program.

What the government alleged

According to the Justice Department, a Lockheed bonus program that started in 2021 gave extra annual raises to the top 20% of employees in each business area. Before final picks were made, the company ran a statistical check on the race and sex makeup of the list, and some human resources staff allegedly pushed managers to swap out white employees for minority employees to clear those flags.

The government also alleged that Lockheed tied some managers’ incentive pay to demographic hiring and promotion goals and offered some mentoring and leadership programs based on race or sex.

Part of the money will go to Tim Booher, a former Lockheed vice president who filed a whistleblower lawsuit in federal court in Texas. Under the agreement he will receive $4.4 million.

The company’s response

In a statement reported by news outlets, Lockheed said it did not admit liability and decided to settle so it could put the matter behind it and stay focused on its national security work. The Justice Department said the company cooperated in resolving the case.

The EEOC agreement also requires Lockheed to keep race and sex out of hiring, pay, bonus and promotion decisions, and allows the agency to review the company’s compliance.

The stakes

The Justice Department said this is its fourth False Claims Act settlement over alleged racial discrimination against employees since it launched a civil rights fraud initiative in May 2025. The case shows the Trump administration using a Civil War-era fraud law, normally aimed at overbilling, to challenge diversity policies at companies that hold federal contracts.

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Sources: U.S. Department of Justice, U.S. Equal Employment Opportunity Commission, Associated Press, Bloomberg Law.