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Dive Insight:
The settlement awarded $22 million to the U.S. for alleged violations of the False Claims Act and about $7.5 million to more than 1,000 affected Lockheed employees for alleged race discrimination against White employees in violation of Title VII of the Civil Rights Act.
The government said that such represents “the largest class of workers to publicly recover [funds] under an EEOC settlement on account of alleged Title VII violations arising from or relating to a DEI program or practices.”
At issue was a “Compensation Adder” incentive program Lockheed Martin launched in 2021, in which the top 20% of employees in each business area received an extra pay increase over the annual companywide increase. The government alleged that HR personnel “exerted pressure on leaders” to remove nonminority employees initially selected for the program and add minority workers.
“The resolution reflects a core EEOC enforcement priority: identifying and remedying unlawful race and sex discrimination carried out by employers under the euphemism of diversity, equity, and inclusion. Title VII protects every worker from employment discrimination on the basis of race — and that protection does not yield when discriminatory decisions are framed as diversity initiatives,” Lucas said in a statement.
Lockheed Martin said it agreed to the settlement “to avoid the distraction and expense of prolonged litigation.”
“We continue to deny the allegations, which relate to past practices. We did not admit liability, determining it would be best for all involved to put these matters behind us so we can remain focused on our critical national security mission,” the company said in a statement. “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 Trump administration has used the False Claims Act to target federal contractors’ diversity, equity and inclusion efforts and has also secured high-dollar settlements from management and technology consulting firm Accenture and Big Four professional services firm Deloitte.
“Companies, especially those that do business with the federal government, should not make DEI compensation decisions that prioritize an employee’s race over the merit of their work,” Associate Attorney General Stanley Woodward Jr. said in a statement. “The Department remains steadfast in its commitment to eliminating woke, unconstitutional practices from workplaces of companies that receive federal taxpayer funds.”
Woodward said the Lockheed Martin resolution is DOJ’s fourth False Claims Act settlement over allegations of racial discrimination against employees.