Lockheed Martin to pay $29.5 million to settle federal discrimination claims

Lockheed Martin has agreed to pay US$29.5 million to settle claims brought by the administration of President Donald Trump alleging the defense contractor discriminated against white workers through its diversity and equity efforts in an internal bonus program.

Settlement Details

According to a settlement announced Wednesday by the Justice Department and the Equal Employment Opportunity Commission (EEOC), the payment breakdown is as follows:

• US$22 million will be paid to the U.S. government to resolve claims that the company failed to comply with anti-discrimination requirements in its federal contracts.
• US$7.5 million will be paid to more than 1,000 affected employees as part of a settlement with the EEOC regarding alleged violations of Title VII of the 1964 Civil Rights Act.

Lockheed Martin denied the allegations but stated it "agreed to resolve this matter with the Department of Justice and the Equal Employment Opportunity Commission to avoid the distraction and expense of prolonged litigation." The company added, "We did not admit liability, determining it would be best for all involved to put these matters behind us so we can remain focused on our critical national security mission."

Allegations and Investigation

The allegations involve a 2021 program designed to provide the top 20% of employees with merit-based salary increases and promotion opportunities. According to the settlement agreement, the company used an analysis to "flag" statistical outliers based on race and sex composition. While managers were instructed to review these flags based on merit without considering protected characteristics, the Justice Department alleged that Lockheed Martin personnel "exerted pressure on leaders in their business group to resolve race-related ‘flags’ by directing them to add or remove particular employees based on race."

The investigation was triggered by complaints from Tim Booher, a former vice president at Lockheed Martin. Booher, who will receive US$4.4 million under a whistleblower provision of the False Claims Act, resigned in May 2023, stating he "felt that he could no longer be complicit in LMC’s illegal discrimination."

Legal Context

The administration has utilized the 1863 False Claims Act to target federal contractors regarding diversity, equity, and inclusion (DEI) practices. The law allows for damages against contractors that make false claims to the government. The Justice Department has reached similar settlements with IBM, Deloitte, and Accenture.

EEOC Chair Andrea Lucas, who filed a commissioner’s charge against the company, stated, "Title VII protects every worker from employment discrimination on the basis of race — and that protection does not yield when discriminatory decisions are framed as diversity initiatives."

Civil rights groups have criticized these administration policies, arguing they target long-established practices intended to prevent intentional or unintentional discrimination against marginalized groups. Several groups have filed lawsuits against the administration's anti-DEI policies.

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Sources

• bnnbloomberg.ca: Lockheed Martin to pay $29.5M to settle discrimination claims
• ctvnews.ca: Lockheed Martin to pay $29.5M to settle discrimination claims
• thestar.com: Lockheed Martin to pay $29.5 million to settle federal claims it discriminated against white workers

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.