Lockheed Martin to Pay $29.5 Million in a Two-Part Settlement with DOJ and EEOC

On November 3, 2026, the Department of Justice (DOJ) and the Equal Employment Opportunity Commission (EEOC) announced a two-part settlement against Lockheed Martin Corporation to resolve allegations that the company engaged in activities that violated both Title VII of the Civil Rights Act (Title VII) and the False Claims Act (FCA). With financial payouts of $29.5 million to the government, this settlement is the latest example of the government’s strategy of using the FCA to pursue claims of civil rights violations. 

Alleged Violations and Financial Penalties

The DOJ alleges that Lockheed Martin violated the FCA when they certified compliance with anti-discrimination laws by signing federal contracts, knowing that they were engaging in practices that violated those anti-discrimination laws. The DOJ alleges that going as far back as January 1, 2019, Lockheed Martin was taking actions that discriminated against employees and applicants on the basis of their race and sex. The settlement outlines three areas where the DOJ alleges Lockheed Martin engaged in discriminatory practices – compensation decisions, hiring and promotion decisions, and training, mentoring, and leadership development programs.

As one example, the settlement describes Lockheed Martin’s “Compensation Adder” program, launched in 2021 to provide additional pay increases to the company’s top-performing 20% of employees. Under the terms of the program, managers were to nominate employees based on merit, with nominations subject to review by senior leadership to ensure the 20% limit was maintained across business groups. However, the settlement alleges that the company’s actual practices differed from its written policy, citing examples of managers allegedly being instructed to reevaluate performance rankings and alter their selections to change the racial composition of the lists.

The DOJ alleges that race and sex were also considered when the company made hiring and promotion decisions. The settlement describes a management-level incentive plan that included a performance metric based on achieving specific goals for demographics within the workforce. Beyond these goals, the DOJ alleges that the company set “aspirational plus” goals that “stretch beyond what’s potentially achievable,” with some of these goals being met for minorities.

Lastly, the settlement alleges that Lockheed Martin had training, mentoring, and leadership development programs that were open only to certain employees depending on their race or sex. An example included in the settlement is an Executive Leadership Diversity Mentoring Program, which was allegedly created to improve career opportunities for minorities and women over others.

While Lockheed Martin denies the allegations, the financial penalties included in the settlement are significant. The company agreed to pay $22 million in civil penalties to the United States. $4.4 million of that will be paid to the whistleblower who initially brought the claim of False Claims Act violations. A former vice president of Lockheed Martin, Tim Booher filed the claim under the False Claims Act whistleblower provision in July 2025, and the DOJ intervened with the civil action in October 2026.

Two-Part Agreement with the EEOC

While a copy of the separate agreement Lockheed Martin came to with the EEOC has not been made public, press releases by both the DOJ and the EEOC include details of that settlement as well. The settlement resolves a Commissioner’s Charge filed by EEOC Chair Andrea Lucas in 2025. Commissioner Charges are charges of discrimination that are brought by a member of the EEOC instead of an individual employee or applicant.

While the details of the Commissioner’s Charge are not public, the agency press releases describe the charge as alleging that Lockheed Martin “engage[d] in race discrimination against white employees, including in performance assessments and in bonus and other compensation decisions.”

The agreement reached with the EEOC will provide over $7.5 million to over 1,000 affected Lockheed Martin employees. The press releases also highlight that this group of over 1,000 white employees is the largest group of workers to receive monetary relief through an EEOC settlement related to Title VII violations in a DEI program or practice.

Similar Settlements Provide Key Takeaways for Employers

Lockheed Martin is the fourth company this year to enter settlements with the DOJ related to claims of violating the FCA through “illegal DEI” programs or practices. IBM, Deloitte, and Accenture all settled similar claims in 2026, and there are similarities between each of these instances that contractors should pay attention to. Being aware of the patterns emerging from these settlements can help contractors evaluate their own risk.

Broad Timeframe

The timeframe referenced in each of these settlements goes back further than many contractors might anticipate. In the Lockheed Martin settlement, the DOJ writes that the “illegal DEI” practices started in 2021. The timeframe outlined in the IBM case starts in 2019, and the Deloitte, and Accenture cases go back to 2017. This is long before January 2025 when the current Administration announced its position on the types of DEI activities that it believes violate federal law. While many employers modified or discontinued DEI practices after the Trump Administration made their position clear, contractors should review their past practices, communications, and policies to determine their level of risk of potential claims under the FCA.

While reviewing prior policies is important, Lockheed Martin’s settlement underscores the importance of understanding how policies were implemented, not just how they were crafted and communicated. Lockheed Martin’s written policy was to re-review the employees selected for the “Compensation Adder” program and did not specifically mandate adding or removing employees based on their race or sex. However, it was how the policy was allegedly carried out by managers that was the focus of the settlement.

Policies and Practices Worth Reviewing

Reviewing the types of violations outlined in each of these settlement sheds light on the types of activities the DOJ considers to be “illegal DEI.” All four settlements have some common themes that employers should pay attention to when evaluating their own practices:

• All four settlements identified training, mentoring, and/or networking opportunities that were offered only to certain employees based on their race or sex.
• All four settlements highlighted the use of workforce demographic goals which allegedly resulted in race and sex being considered in employment decisions to meet those goals. Three of the settlements also noted wide-spread distribution of the organization’s progress toward goals as evidence that the goals encouraged certain manager behavior.
• The Lockheed Martin, IBM, and Deloitte’s settlements detailed the practice of linking compensation to the achievement of workforce demographic goals, which allegedly resulted in employment decisions being affected by race or sex to meet goals.

While these are not the only practices that DOJ would likely take issue with, contractors should pay particular attention to these and similar policies or practices to ensure compliance. 

That being said, it is also important that companies recognize the distinction between what was required of contractors at the time under Executive Order (EO) 11246, and what would have crossed the line as potential discrimination even prior to January 2025. Under EO 11426, as a part of their annual affirmative action plans, contractors were required to set placement goals for minorities or women if a statistical analysis showed them to be underutilized in their workforce. However, EO 11246 also expressly prohibited contractors from taking race or sex into consideration when making employment decisions, regardless of whether it made progress toward or achieved demographic goals.

When evaluating their risk based on programs or policies that occurred in the past, contractors should work with legal counsel to help determine if their actions were within the bounds of what was required under their affirmative action obligations, or if any policies or practices were implemented in a manner that could create risk in the current legal environment.

FCA Whistleblower Provision

Another similarity among these settlements is the presence of an individual whistleblower. While all four settlements allege the violation of the FCA, two of them began from an individual whistleblower bringing a claim under the qui tam provision of the FCA. The qui tam, or whistleblower, provision of the FCA, creates risk from individuals bringing a claim, not just the government. Qui tam suits allow a private party, known as a relator, to file suits for false claims against the government. The relator then receives a percentage of money that the federal government recovers.

In both the Deloitte and Lockheed Martin settlements, the whistleblower received over $4 million. These substantial monetary awards will likely lead to other lawsuits being brought by whistleblowers, and it is important for contractors to understand that an FCA whistleblower does not have to be an employee or applicant directly impacted by any DEI-related employment practices. 

Review Contract Certifications and Evaluate Risk

While there are similarities between all these cases that contractors should pay attention to, the clearest takeaway is that the FCA continues to be the central enforcement mechanism for this Administration. As the key of any FCA claim is that the contractor falsely certified compliance with contractual obligations, employers need to be aware of any aspects of their federal contracts that involve certifications related to DEI or EEO compliance.

This includes prior contractual certifications tied to Executive Order 11246 and other federal civil rights laws and current certifications regarding compliance with the affirmative action provisions under Section 503 of the Rehabilitation Act (Section 503) and the Vietnam Era Veterans Readjustment Assistance Act (VEVRAA), as well as new contract certifications under recent Executive orders, such as Executive Order 14398. Under the FCA, it is the certification itself that creates the possible exposure – not whether the government can show an actual violation of federal civil rights laws.

Federal contractors should take steps to determine whether they can truthfully certify their compliance with all required DEI and EEO-related contract certifications. Reviewing written policies is not enough – evaluating actual hiring, promotion and termination decisions for risk is a key component of a well-developed compliance strategy.