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Lockheed Martin $29.5M Settlement: DEI False Claims Act Risk

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Lockheed Martin $29.5M Settlement: DEI False Claims Act Risk
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BLOG OVERVIEW: Lockheed Martin agreed on November 3, 2026, to pay about $29.5 million to resolve DOJ and EEOC allegations that it considered race and sex in compensation, hiring, promotion, and development programs while certifying compliance with civil rights laws in its federal contracts. The two-part resolution pairs a $22 million False Claims Act settlement, including a $4.4 million whistleblower share, with roughly $7.5 million for more than 1,000 employees under a Commissioner’s Charge. It is the fourth DEI False Claims Act settlement this year and the largest combined resolution so far, reinforcing that a contractor’s equal opportunity certification is a central enforcement hook.

On Tuesday, November 3, 2026, the Department of Justice (DOJ) announced a two-part settlement with Lockheed Martin Corporation (Lockheed Martin), reached alongside the Equal Employment Opportunity Commission (EEOC). Lockheed Martin agreed to pay approximately $29.5 million to resolve allegations of employment discrimination and related false certifications of compliance with civil rights laws in violation of the False Claims Act (FCA). The claims resolved by the settlements are allegations only; there has been no admission of liability.

Settlements of alleged Title VII of the Civil Rights Act (Title VII) and False Claims Act violations can be costly. Lockheed Martin’s settlement includes payment of:

  • $22 million to the United States under the False Claims Act settlement, including civil penalties, of which $10 million is compensation for the government’s losses (restitution), plus interest; and
  • Approximately $7.5 million to be paid to over 1,000 Lockheed Martin employees under a settlement agreement with EEOC resolving the 2025 Commissioner’s Charge filed by EEOC Chair Andrea Lucas.

DOJ and EEOC Allegations

The Commissioner’s Charge alleged race discrimination against white employees, including in the company’s performance assessments and in bonus and other compensation decisions. EEOC notes, “[t]his 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 [diversity, equity, and inclusion] program or practices.”

Additionally, DOJ and EEOC alleged that Lockheed Martin took race into account in compensation decisions through an incentive program in which some HR personnel pressured business-group leaders to alter those decisions based on race. DOJ also alleged that the defense contractor took race or sex into account in hiring and promotion decisions to meet race- and sex-based goals. Finally, the government alleged that Lockheed Martin offered training, mentoring, and leadership development programs on the basis of race and sex.

DOJ’s civil settlement also includes the resolution of claims brought under the qui tam (whistleblower) provisions of the False Claims Act. This part of the settlement ends a whistleblower lawsuit that Tim Booher, a former Lockheed Martin vice president, filed in July 2025 in federal court in Texas under the False Claims Act.

According to his LinkedIn profile, Mr. Booher was employed at Lockheed Martin for two years before working for Lockheed Martin’s direct competitor, Boeing, and various federal agencies. A current advisor to the Department of Defense and Air Force Research Laboratory, Booher will receive $4.4 million plus interest from the government’s $22 million False Claims Act recovery.

Implications for Federal Contractors

The Lockheed Martin settlement is another example of the Whole-of-Government Approach that current EEOC Principal Deputy General Counsel and nominee for EEOC General Counsel Catherine Eschbach warned contractors about at SHRM Blueprint in late 2025. Eschbach was previously Director of the Office of Federal Contractor Compliance Programs. EEOC, the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Texas, and the Department of Defense’s Office of Inspector General worked together to reach this two-part settlement agreement.

For federal contractors, this settlement is a reminder that most contracts contain a provision requiring them to comply with civil rights and equal employment opportunity laws and to certify their compliance. Contractors and subcontractors should frequently audit their HR and DEI programs and practices for risk so they can certify compliance in their contracts in good faith.

This is the fourth False Claims Act settlement resolving allegations of racial discrimination this year after similar settlements with IBM, Deloitte, and Accenture, and at roughly $29.5 million, the largest combined resolution to date.

DCI will continue to monitor similar cases and provide updates as they occur.

How DCI is Helping Our Clients with This New Risk

In early 2025, enforcement of federal contractor non-discrimination requirements shifted in priority and magnitude. FedAssure, a compliance platform that combines 25 years of DCI's non-discrimination expertise with cutting-edge technology, was built in partnership with SHRM as a response to these shifting enforcement priorities. Our intent is that a federal contractor using FedAssure never signs an equal opportunity certification without first knowing, with evidence and confidence, whether the certification is true.

FedAssure does this through three integrated pillars:

  • AI-powered policy and program analysis: Before you certify, FedAssure reviews your written policies, public-facing statements, and internal programs (e.g., mentoring, leadership development, staffing protocols, promotion processes) for exactly the kind of race- or sex-restricted eligibility criteria and demographic goal-setting that formed the core of DOJ's allegations against Lockheed Martin.

  • Role-based compliance survey: FedAssure goes beyond the policy on paper. It asks the people who actually make these decisions, such as staffing managers, promotion committees, and business unit leaders, about their practices and flags risk based on those responses.

  • Workforce analytics: FedAssure applies a high-level workforce analytics engine to test whether your actual staffing, promotion, and compensation patterns could be read as evidence of the kind of goal-driven, demographically tracked decision-making DOJ is now targeting.

If your organization has federal contracts or subcontracts, FedAssure makes sure certification is accurate before it is signed and catches problematic policies and practices before they become the subject of a DOJ press release with your company's name in the headline.

To learn more about FedAssure and how it can help your organization assess policies, practices, public-facing materials, and employment data for violations of non-discrimination laws, visit our FedAssure page.