Defense company Lockheed Martin has agreed to pay $29.5 million to settle allegations by President Donald Trump’s administration that it discriminated against white workers in its efforts to promote diversity and equity in an internal bonus program.
Lockheed Martin will pay $22 million to the U.S. government to resolve allegations that it failed to comply with anti-discrimination requirements in its federal contracts, according to the agreement announced Tuesday evening by the Justice Department and the Equal Employment Opportunity Commission.
Additionally, Lockheed Martin will pay $7.5 million to more than 1,000 affected employees as part of a settlement with the EEOC, which was investigating the company for violations of Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on race.
In a statement, Lockheed Martin denied the government’s allegations but said it “agreed to resolve this matter with the Department of Justice and the Equal Employment Opportunity Commission to avoid the distraction and expense of protracted litigation.”
“We have not admitted responsibility, believing that it would be best for everyone involved to put these matters behind us so that we can remain focused on our critical national security mission,” the company said.
This case is the latest example of the Trump administration’s use of the False Claims Act of 1863 to pressure federal contractors to abandon diversity, equity and inclusion practices. The law states that contractors who make false statements to the government could be held liable for significant damages. Typically no stranger to fighting fraud, the Trump administration has invoked the False Claims Act against companies it says have continued discriminatory practices under the guise of promoting diversity.
The Justice Department has reached similar agreements with IBM, Deloitte and Accenture.
Civil rights groups have criticized the Trump administration’s policies, which take aim at many long-established practices aimed at ensuring that hiring, promotion and other employment practices do not discriminate, intentionally or unintentionally, against traditionally marginalized groups. Several groups have filed lawsuits against the Trump administration’s anti-DEI policies.
The allegations against Lockheed Martin revolve around a program the company introduced in 2021 to provide the top 20% of employees with a pay raise and promotion opportunities based on merit, according to the settlement agreement.
Managers submitted applications for the bonuses, which the company then analyzed to “flag” statistical outliers based on the race and gender of the roster. If the list of appointments raised concerns, managers were asked to review their appointments and the “basis of selection based on merit, without requiring them to take into account any protected characteristic”.
But in practice, according to the Justice Department, Lockheed Martin personnel “pressured their occupational group leaders to resolve race-related ‘flags’ by ordering them to add or remove certain employees based on their race.” » The Justice Department said officials were asked to remove non-minorities from the selections and add racial minorities.
The settlement with the DOJ and EEOC follows complaints filed by Tim Booher, a former Lockheed Martin vice president, who will receive $4.4 million from the U.S. government under a whistleblower provision of the False Claims Act. According to a complaint he filed in federal court in October 2025, Booher resigned from Lockheed Martin in May 2023 because he “felt he could no longer be complicit in LMC’s unlawful discrimination.”
In July 2024, Booher said he met with EEOC Commissioner Andrea Lucas to detail his allegations against the company. Lucas, who was elevated to EEOC chairman after Trump took office in January 2025, filed a complaint against Lockheed Martin, triggering the EEOC investigation.
Lawyers representing Booher released a statement applauding the “amicable conclusion that avoids protracted litigation and ensures compliance with the law in federal contracts.”
Lucas, a vocal critic of DEI practices, has publicly urged white men to file discrimination complaints with the EEOC and filed his own “Commissioner’s Charges” against the diversity practices of companies, including Nike.
“Title VII protects every worker from employment discrimination on the basis of race – and this protection does not relent when discriminatory decisions are framed as pro-diversity initiatives,” Lucas said in a statement announcing the settlement.
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