Lockheed Martin Corporation, the largest defence contractor in the United States, has agreed to pay approximately $29.5 million to settle two sets of federal allegations that it discriminated in employment decisions and then falsely certified to the government that it was obeying anti-discrimination rules in its federal contracts. The Justice Department and the U.S. Equal Employment Opportunity Commission (EEOC) announced the two-part settlement this week. Both agencies state plainly that the claims are allegations only and that there has been no determination of liability; Lockheed denies the allegations.

Source: U.S. Department of Justice, Office of Public Affairs

Under the first part, Lockheed will pay $22 million to the United States to resolve Justice Department allegations that it violated the False Claims Act. The government contends that federal contractors must comply with anti-discrimination conditions written into their contracts, and that from 2019 to the present Lockheed falsely certified that compliance while engaging in discriminatory race- and sex-based employment practices, the department said.

The whistleblower who started it

The False Claims Act case began as a qui tam — whistleblower — lawsuit filed by Tim Booher, a former Lockheed Martin vice president, in the U.S. District Court for the Northern District of Texas (United States ex rel. Tim Booher v. Lockheed Martin Corporation, No. 4:25-cv-00769-P). Under the settlement, Booher will receive $4.4 million as his share of the recovery. Washington Technology reported that Booher alleged the company's human resources team told him to remove 18 white employees from a bonus and compensation program known as Comp Adder and replace them with non-white employees — an allegation Lockheed denies and no court has ruled on.

Source: Washington Technology

The Justice Department intervened in part in the case on October 28, taking over some of the whistleblower's claims. Reporting on the settlement agreement says $10 million of the $22 million is restitution, that the payment carries 4 percent annual interest from October 5, 2026, and that it is due within 14 days of the agreement taking effect.

The EEOC charge: the largest class of its kind

The second part resolves a 2025 Commissioner's Charge filed by EEOC Chair Andrea Lucas herself. The charge alleged that Lockheed violated Title VII of the Civil Rights Act of 1964 by engaging in race discrimination against white employees, including in performance assessments and in bonus and other compensation decisions. Lockheed will pay approximately $7.5 million to more than 1,000 affected employees. The Justice Department said this is the largest class of workers to publicly recover under an EEOC settlement on account of alleged Title VII violations arising from or relating to a DEI program or practices.

Source: U.S. Department of Justice, Office of Public Affairs

Associate Attorney General Stanley E. Woodward Jr. described the resolution as the department's fourth False Claims Act settlement over alleged racial discrimination against employees. The case was handled under the Justice Department's Civil Rights Fraud Initiative, launched in May 2025, which uses the False Claims Act — a law built for contractor fraud — against contractors accused of certifying civil-rights compliance they did not deliver.

Why this matters beyond one company

The theory at the heart of the case reaches every company that sells to the federal government: anti-discrimination promises in a federal contract are treated as conditions of payment, so the government argues that breaking them while billing Washington is a false claim, not only an employment dispute. For Lockheed's workforce of well over 100,000 people, the EEOC part also sets the terms going forward — the agreement requires the company to comply with Title VII and Executive Order 14151 and to maintain a workplace where race and sex are not considered in hiring, pay, bonus or promotion decisions, according to the Justice Department.

For the more than 1,000 employees in the EEOC class, the settlement means individual payments out of the roughly $7.5 million fund — an average of under $7,500 per worker before any distribution formula is applied. Neither agency has published a per-person breakdown, and the settlement documents, not any court verdict, are what govern who qualifies.

What happens next is administrative rather than courtroom drama: the False Claims Act payment falls due on the settlement's timetable, the EEOC fund must be distributed to the class, and Lockheed continues operating under the compliance terms it accepted — all without any judge ever deciding whether the underlying discrimination allegations were true. That unresolved status is exactly why both the government and the company describe the claims the same way: allegations, settled, denied, and never adjudicated.

Source: U.S. Department of Justice, Office of Public Affairs