Lockheed Martin has agreed to pay nearly $30 million to resolve allegations from the Trump administration that its diversity, equity and inclusion (DEI) initiatives resulted in discrimination against white employees.
The settlement, announced by two federal agencies, includes $22 million to settle claims that the defense giant misrepresented its compliance with federal anti-discrimination laws while pursuing government contracts. Another $7.5 million will be distributed among more than 1,000 employees allegedly affected by the company’s workplace practices.
Lockheed Martin denied the allegations, saying the decision to settle was driven by a desire to avoid a lengthy legal battle.
“We did not admit liability,” the company said, adding that resolving the dispute would allow it to concentrate on its national security responsibilities.
Federal Agencies Challenge Lockheed’s Pay and Promotion Policies
The allegations centre on a compensation initiative introduced by Lockheed Martin in 2021. Known as the “Compensation Adder” programme, it offered additional annual pay increases to the top 20% of employees in each business division.
According to the US Department of Justice, managers were initially instructed to select employees based on merit. However, authorities alleged that some managers were later pressured to reconsider their choices based on the racial composition of those selected.
The agencies also claimed that race and sex influenced hiring, promotions, training opportunities and mentoring assignments as the company sought to meet internal diversity targets.
The US Equal Employment Opportunity Commission (EEOC), which oversees workplace discrimination laws, said the settlement involves more than 1,000 employees — the largest publicly announced group in an EEOC case concerning DEI practices.
EEOC Chair Andrea Lucas said federal protections against racial discrimination apply to all employees, regardless of whether the decisions are presented as part of diversity programmes.
Whistleblower Complaint Triggered Federal Investigation
The Justice Department’s case originated from a whistleblower lawsuit filed last year by Tim Booher, a former Lockheed Martin vice president.
Booher is set to receive $4.4 million from the settlement, according to the department. He is currently serving as an adviser to the Pentagon.
The agreement adds Lockheed Martin to a growing list of major American companies that have reached settlements with the Trump administration over workplace diversity policies. IBM, Accenture and Deloitte have also faced similar disputes as the administration intensifies its efforts to roll back DEI programmes across private businesses, government institutions, education and healthcare.
The settlement marks another significant development in the administration’s campaign to challenge corporate diversity initiatives, with the financial consequences now extending to one of the country’s largest defense contractors.
