Lockheed Martin has agreed to pay about $29.5 million to resolve federal allegations that it discriminated against White employees through a compensation program and falsely certified compliance with federal civil rights laws. The U.S. Department of Justice and the Equal Employment Opportunity Commission announced the two-part settlement Wednesday.
The agreement allocates $22 million to the U.S. government over alleged violations of the False Claims Act. About $7.5 million will go to more than 1,000 employees as part of the resolution of allegations that the company violated Title VII of the Civil Rights Act through race discrimination.
The case concerns a “Compensation Adder” program introduced in 2021. It provided an additional pay increase to the top 20% of employees in each business area, beyond the companywide annual increase. The government alleged that human resources personnel pressured leaders to remove nonminority employees initially selected for the program and replace them with minority employees.
The EEOC described the settlement as the largest class of workers to publicly recover funds under an agency settlement involving alleged Title VII violations arising from or related to a diversity, equity and inclusion program or practices.
Lockheed Martin denied the allegations, which it said concerned past practices, and said it did not admit liability. The company said it agreed to settle to avoid the distraction and cost of prolonged litigation. It added that it remains committed to recognizing performance, rewarding excellence and complying with applicable laws.
The Justice Department said the resolution was its fourth False Claims Act settlement over allegations of racial discrimination against employees. Associate Attorney General Stanley Woodward Jr. said companies doing business with the federal government should not make compensation decisions that prioritize race over the merit of employees’ work.
Sources: HR Dive.