Lockheed Martin to Pay $29.5 Million Over Alleged Race-Based Bonus Program; Settlement Shows Former VP Whistleblower Gets $4.4 Million

Lockheed Martin will pay about $29.5 million to resolve federal allegations that it took race and sex into account in employee bonuses, hiring and promotions while certifying to the government that it did not, the Justice Department and the Equal Employment Opportunity Commission announced Tuesday.

The deal has two parts: $22 million to the United States under the False Claims Act, and about $7.5 million to more than 1,000 Lockheed employees under a separate EEOC agreement. The Digital Free Press read the Justice Department's settlement agreement, which shows the case began with a whistleblower suit filed by a former company executive.

What the Government Alleges

According to the agreement, starting in 2021 Lockheed ran a program called "Compensation Adder," or "Comp Adder," that gave the top 20 percent of employees in each business area an extra raise. The government alleges the company ran a statistical check that "flagged" selection lists by race and sex, and that some human resources staff pressed managers to remove non-minority employees and add minority employees to clear the flags.

The agreement quotes one HR employee telling business leaders that "increasing POC" (people of color) for Comp Adder "will result in removing equal count of non-minority." It quotes a Director of Global Diversity and Inclusion telling HR staff that "we will identify at least 11 additional PoC adds from other functions and the level 2 Race flag will clear," followed by "Let's goooooooooo."

The government also alleges Lockheed tied part of a management incentive plan to demographic goals, tracked those goals in color-coded quarterly reports, set 2023 "aspirational plus" hiring goals described as stretching "beyond what's potentially achievable," and offered some mentoring programs based on race or sex.

Inside the Lockheed Martin Settlement

The agreement says Tim Booher, whom the Justice Department describes as a former Lockheed vice president, filed a qui tam lawsuit on July 10, 2025, in federal court in the Northern District of Texas. The government joined the case in part on Oct. 28, 2026. Under the deal, Booher will receive $4.4 million of the federal payment.

Of the $22 million, $10 million is labeled restitution, and interest runs at 4 percent a year from Oct. 5, 2026, until payment. Lockheed must pay within 14 days.

The agreement also says Lockheed may not charge the costs of the case, its defense or the settlement to any federal contract, and must find and repay within 90 days any such costs it already billed. The release covers the company only. The agreement expressly reserves "any liability of individuals."

Lockheed denies the allegations, and the agreement states it is "neither an admission of liability by Lockheed nor a concession by the United States that its claims are not well-founded."

The EEOC Agreement

The EEOC part resolves a 2025 Commissioner's Charge filed by EEOC Chair Andrea Lucas. According to the Justice Department, it requires Lockheed to keep a merit-based workplace where race and sex are not considered in hiring, pay, bonus or promotion decisions, and lets the EEOC review compliance. The agencies called it the largest class of workers to publicly recover under an EEOC settlement tied to a DEI program.

"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 E. Woodward Jr. said. He said it is the department's fourth False Claims Act settlement over alleged racial discrimination against employees. The department's Civil Rights Fraud Initiative, which brings such cases, launched in May 2025.

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Sources: Settlement Agreement, United States, Lockheed Martin Corporation and Tim Booher, United States ex rel. Booher v. Lockheed Martin Corp., No. 4:25-cv-00769 (N.D. Tex.) (https://www.justice.gov/opa/media/1469801/dl?inline); U.S. Department of Justice, "Lockheed Martin Agrees to Pay $29.5M to Resolve Alleged Employment Discrimination Violations," Nov. 3, 2026 (https://www.justice.gov/opa/pr/lockheed-martin-agrees-pay-295m-resolve-alleged-employment-discrimination-violations). Cover photo: "Lockheed Martin headquarters" by Coolcaesar at en.wikipedia, CC BY-SA 3.0, via Wikimedia Commons.