Lockheed Martin agrees to $29.5 million DEI-related settlement with the DOJ and EEOC

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Lockheed Martin became the latest federal contractor to settle with both the Department of Justice (DOJ) and the Equal Employment Opportunity Commission (EEOC) on Nov. 3, following accusations that it violated the False Claims Act.

The DOJ launched an investigation last year after a whistleblower complaint (from Lockheed’s former VP, who will receive a $4.4m payout as part of this settlement) alleged that Lockheed Martin considered race and gender in hiring and promotions to help the company achieve its demographic representation goals. The department also alleged that business units received additional compensation for achieving certain demographic goals.

The EEOC part of the settlement includes a $7.5 million payout to more than 1,000 employees at Lockheed Martin, over claims that the company discriminated against white employees during performance reviews and in compensation decisions, Reuters reported.

The government accused Lockheed Martin of employment discrimination and alleged, among other things, that the HR department “exerted pressure on leaders in their business group…to remove certain non-minority employees” or add “minority employees who had not been initially nominated” to its compensation incentive program, according to the settlement agreement.

“Today’s resolution, just like the other recent settlements, protects the employees of federal contractors from unlawful discrimination and will hold federal contractors accountable for not following the law,” Brett A. Shumate, assistant attorney general of the Justice Department’s Civil Division, said in a press release from the DOJ. However, the agreement acknowledges that the settlement is not an admission of wrongdoing, and Lockheed Martin has denied the allegations.

Lockheed Martin responded to HR Brew’s request for comment by referring to a statement on the company’s website. “We continue to deny the allegations, which relate to past practices…Lockheed Martin remains committed to recognizing performance and rewarding excellence. We take our obligations to comply with applicable laws seriously and will continue to ensure our employment and talent management practices reflect that.”

“The allegations named in the latest Lockheed Martin settlement are concerning. If true, they would constitute a violation of federal civil rights laws under any administration, regardless of the current EEOC’s enforcement priorities,” Lily Zheng, a fairness and inclusion strategist, told HR Brew via email. “Organizational diversity, equity, and inclusion work has always been about maintaining compliance with civil rights law and proactively improving workplace environments to become more fair over time.”

Zheng added that rigorous HR practitioners look at potential biases in performance evaluations and not change the process to achieve representation goals. “Violations of civil rights law, even in the name of ‘greater diversity,’ are never justified,” they said.

Lockheed Martin previously scrapped its DEI programming in early 2025 after years of diversity and inclusion efforts aimed in part at ensuring compliance with federal affirmative action rules.

“We are taking immediate action to ensure continued compliance and full alignment with President Trump’s recent executive order,” the company said in January 2025.

The Trump administration made similar accusations in settlements with Accenture, Deloitte, and IBM earlier this year; the companies did not admit to any wrongdoing. The administration has used the 1863 False Claim Act to target federal contractors with diversity initiatives. This interpretation of the law to target DEI has not yet been tested in court.

“Whether these claims had any foundation to them that the DOJ is making, it’s a really strong incentive on these parties to just settle and move forward because the consequences of fighting the federal government, fighting the claims in court, are that this administration could punitively rip away contracts from entities that they don’t like,” David Glasgow, co-founder of the Meltzer Center for Diversity, Inclusion and Belonging at New York University School of Law, told HR Brew previously.