Lockheed Martin to Pay $29.5 Million in Employment Discrimination Settlement

Shibbir Ahmed, Washington, DC — Lockheed Martin has agreed to pay approximately $29.5 million to resolve allegations of race and sex discrimination in its employment practices, the U.S. Department of Justice (DOJ) and the Equal Employment Opportunity Commission (EEOC) announced Tuesday, November 3. Under the two-part settlement, the Bethesda, Maryland-based defense and aerospace company will pay $22 million to the United States and more than $7.5 million to over 1,000 affected employees.

The Justice Department alleged that, from 2019 to the present, Lockheed Martin falsely certified compliance with federal anti-discrimination requirements while engaging in employment practices that allegedly took race and sex into account in hiring, compensation, promotions, and other workplace decisions. The $22 million agreement resolves allegations under the False Claims Act, which allows the federal government to pursue companies that allegedly submit false claims or certifications in connection with government contracts.

A central focus of the government’s allegations was Lockheed Martin’s incentive compensation program known as “Compensation Adder,” or “Comp Adder.” Introduced in 2021, the program provided additional pay increases to the top 20% of employees within each business area, beyond the company’s annual standard salary increase.

According to the Justice Department, managers initially nominated employees based on merit and performance. However, before final selections were made, the company allegedly conducted statistical analyses to identify potential disparities in the racial and gender composition of the lists.

The government alleged that some human resources personnel subsequently pressured business leaders to change their selections to address race-related statistical flags. In certain cases, the Justice Department alleged, non-minority employees were removed from the lists while minority employees who had not initially been nominated were added.

The government’s filing quoted one HR employee as saying that increasing the number of people of color on the Comp Adder list would require removing an equal number of non-minority employees. The Justice Department also alleged that Lockheed Martin considered race and sex in certain hiring and promotion decisions to advance internal workforce demographic targets.

Additionally, the company allegedly offered certain training, mentoring, and leadership development opportunities based on employees’ race or sex, potentially affecting their career advancement opportunities.

The separate EEOC settlement resolves a 2025 Commissioner’s Charge filed by EEOC Chair Andrea Lucas. The charge alleged that Lockheed Martin discriminated against white employees on the basis of race in performance evaluations, bonuses, and other compensation decisions, including through its Comp Adder program. Under the agreement, more than 1,000 employees will receive a combined total exceeding $7.5 million.

The EEOC described the settlement as the largest publicly announced class of workers to recover under an EEOC settlement involving alleged Title VII violations arising from or relating to a diversity, equity, and inclusion (DEI) program or practices.

The Justice Department’s settlement also resolves a whistleblower lawsuit filed by Tim Booher, a former Lockheed Martin vice president. Under the False Claims Act’s whistleblower provisions, private individuals may bring lawsuits on behalf of the federal government and receive a share of any financial recovery. As part of the settlement, Booher will receive $4.4 million.

EEOC Chair Andrea Lucas said Title VII of the Civil Rights Act requires employers to treat employees as individuals and prohibits employment decisions motivated by race or sex. She said the settlement reflects the agency’s priority of identifying and addressing alleged unlawful discrimination carried out under the banner of diversity, equity, and inclusion.

Associate Attorney General Stanley E. Woodward Jr. said companies doing business with the federal government should not make compensation decisions that prioritize an employee’s race over the merit of their work. Assistant Attorney General Brett A. Shumate also emphasized that federal contractors must make hiring, promotion, and compensation decisions without regard to race or sex.

In addition to financial payments, the EEOC agreement requires Lockheed Martin to comply with Title VII of the Civil Rights Act and Executive Order 14151. The company must maintain a merit-based workplace in which race and sex are not considered in hiring, compensation, bonus, or promotion decisions. The EEOC may monitor the company’s compliance throughout the agreement’s term. The Justice Department said Lockheed Martin cooperated in resolving the matters.

The coordinated resolution involved the EEOC, the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Texas, and investigative assistance from the Department of War’s Office of Inspector General.