Lockheed Martin pays $29.5 million in Texas settlement
The defense contractor will pay over 1,000 workers in Grand Prairie, Fort Worth, and Lufkin after federal officials alleged race and sex discrimination in hiring and pay.
By Salma Farouk ·
Lockheed Martin Corporation will pay approximately $29.5 million to settle federal claims of employment discrimination. The company announced the resolution on Tuesday, ending investigations into its hiring and compensation practices. This settlement affects more than 1,000 workers at the company’s Texas facilities.
Federal officials stated that Lockheed Martin violated its obligations as a government contractor. They alleged the company considered race and sex when making decisions about hiring, pay, promotions, and training. Despite these practices, the company told the government it operated without regard to protected characteristics.
The payment is split between two federal agencies. Lockheed Martin will pay $22 million to the U.S. Department of Justice under the False Claims Act. It will also pay $7.5 million to the Equal Employment Opportunity Commission to compensate affected employees. This EEOC payment is the largest class recovery to date involving diversity, equity, and inclusion programs under Title VII.
Prosecutors pointed to a 2021 incentive program called Compensation Adder as a key issue. This program was designed to give extra pay increases to the top 20% of employees in each business division. Federal authorities said human resources staff flagged demographic outliers after initial merit-based nominations. They pressured business leaders to remove non-minority employees from the list and add minority employees who had not originally qualified.
The Justice Department also cited internal hiring goals and executive mentoring programs restricted by race or sex. Management compensation metrics were linked to demographic representation goals. Tim Booher, a former Lockheed Martin vice president, filed the original whistleblower lawsuit under the False Claims Act. He will receive $4.4 million as his statutory share of the recovery.
Associate Attorney General Stanley E. Woodward Jr. said companies doing business with the federal government should not prioritize an employee’s race over the merit of their work. EEOC Chair Andrea Lucas stated that Title VII protects every worker from discrimination based on race. She noted that this protection does not yield when discriminatory decisions are framed as diversity initiatives. Under the settlement terms, Lockheed Martin agreed to adhere to merit-based hiring and promotion practices without considering race or sex.
Lockheed Martin maintains three primary production campuses in Texas: Fort Worth, Grand Prairie, and Lufkin. The company also operates field offices, customer support centers, engineering labs, and embedded military support detachments across more than 20 Texas cities and military installations. Federal prosecutors emphasized that the claims resolved in the settlement are allegations only and do not constitute a formal determination of liability.
