Lockheed Martin Agrees to $29.5 Million Settlement Over Federal Claims

Settlement resolves government claims

Lockheed Martin has agreed to pay $29.5 million to settle claims by the Trump administration that the company discriminated against white workers through its diversity and equity efforts in an internal bonus program. The settlement was announced late Tuesday by the Justice Department and the Equal Employment Opportunity Commission, according to reports published November 4-5, 2026.

The company said it denied the government’s allegations and did not admit liability. It said it agreed to resolve the matter with the Justice Department and EEOC to avoid the distraction and expense of prolonged litigation.

Payment is divided between 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. The company will separately pay $7.5 million to more than 1,000 affected employees as part of the EEOC settlement.

The EEOC had been investigating whether the company violated Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on race.

Allegations focused on merit bonuses

The allegations concerned a program Lockheed Martin introduced in 2021 to provide the top 20% of employees with merit-based salary increases and promotion opportunities. Managers submitted bonus nominations, which the company analyzed for statistical outliers based on the racial and sex composition of the lists.

According to the Justice Department, managers were asked to review flagged nominations and the merit-based basis for selections without considering protected characteristics. The department also claimed company personnel pressured business leaders to resolve race-related flags by adding or removing particular employees based on race, including directing managers to remove nonminorities and add racial minorities. Lockheed Martin denied the government’s allegations in its statement.

False Claims Act was central to the case

The settlement arose from a False Claims Act complaint filed in federal court in October 2025 by Tim Booher, a former Lockheed Martin vice president. Booher said in the complaint that he resigned in May 2023 because he believed he could no longer be complicit in alleged discrimination.

Under a whistleblower provision of the False Claims Act, the U.S. government will pay Booher $4.4 million.

The case is part of the Trump administration’s use of the False Claims Act to challenge federal contractors’ diversity, equity and inclusion practices. The Justice Department has reached similar settlements with IBM, Deloitte and Accenture. Civil-rights groups have criticized the administration’s approach and have filed lawsuits against its policies.