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Lockheed Martin has agreed to pay about $29.5 million to settle allegations that race and sex played a role in workplace decisions that were supposed to be based on merit.
More than 1,000 employees are covered by the worker-payment portion of the deal. But most of the money goes to the federal government, not employees: $22 million resolves False Claims Act allegations, while approximately $7.5 million is for workers under a separate Equal Employment Opportunity Commission agreement.
The claims are allegations only. There has been no determination of liability, according to the EEOC’s announcement. Lockheed denied wrongdoing and said it settled to avoid the distraction and expense of prolonged litigation, USA TODAY reported.
How a pay program became a federal case
The government’s allegations focus in part on a program called Compensation Adder, introduced in 2021. It offered an extra pay increase to the top 20% of employees in each business area, on top of the company’s regular annual increase.
Managers initially nominated employees using performance criteria. The government alleged that some human resources staff then pressured leaders to change selections based on race after statistical checks flagged the racial makeup of the lists.
The EEOC agreement resolves a 2025 commissioner’s charge alleging discrimination against white employees in performance assessments, bonuses and other compensation decisions, including the Compensation Adder program.
The Justice Department also alleged that race or sex influenced hiring, promotions and access to certain training and mentoring programs. Its False Claims Act case concerned allegations that Lockheed falsely certified compliance with anti-discrimination requirements in federal contracts from 2019 onward.
What changes for workers and contractors
Alongside the employee payments, the EEOC agreement requires Lockheed to maintain a merit-based workplace without considering race or sex in hiring, pay, bonuses or promotion decisions. The agency may review compliance during the agreement.
The announcement does not give individual payment amounts or a public application process. The roughly $7.5 million is a pool for the covered employees, not a uniform payment promised to every Lockheed worker.
For other companies paid through federal contracts, the case shows why a workplace policy can become a contracting risk. The government tied its claim to certifications of compliance with civil-rights requirements, using an anti-fraud law rather than relying only on an employment discrimination claim.
The government settlement also resolves a whistleblower case filed by former Lockheed vice president Tim Booher. He will receive $4.4 million under the resolution, the agencies said. That award is part of the government-case resolution, not an extra $4.4 million added to the headline settlement.
For the workers covered, the immediate result is monetary relief. For the company, settling ends these allegations without a finding that it broke the law, while leaving ongoing compliance obligations under the EEOC agreement.
JBizNews Desk | Washington
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