Lockheed Martin to Pay $29.5M Over Pay-Raise Bias Claims
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An extra pay-raise program for top performers has led Lockheed Martin to a roughly $29.5 million settlement. Federal agencies say the program was bent to favor minority workers over White ones.
Two settlements, two payees
The U.S. Department of Justice and the Equal Employment Opportunity Commission announced the deal on Wednesday. It has two parts. About $22 million goes to the federal government to resolve claims under the False Claims Act. About $7.5 million goes to more than 1,000 Lockheed employees.
The government says the defense and aerospace contractor discriminated against White employees in compensation decisions. It also says the company falsely certified that it complied with federal civil rights laws. Lockheed denies the claims and says they concern past practices.
The "Compensation Adder"
At the center of the case is a program Lockheed launched in 2021. In each business area, the top 20% of employees received an extra pay increase on top of the annual raise given company-wide.
The government alleges that HR personnel "exerted pressure on leaders." It says those pressures were meant to replace the nonminority employees first chosen for the program with minority workers.
The employee payments cover alleged violations of Title VII of the Civil Rights Act. The agencies describe the group as the largest class of workers to publicly recover money under an EEOC settlement tied to a DEI program or practice.
Lucas, Lockheed and DOJ on the deal
EEOC Chair Andrea Lucas called the outcome a core enforcement priority. In her statement she said Title VII protects every worker on the basis of race and that the protection does not yield when decisions are framed as diversity initiatives.
Lockheed said it settled to avoid the expense and distraction of prolonged litigation. It did not admit liability. It added that its employment and talent management practices will keep reflecting its legal obligations.
The company also said it stays committed to recognizing performance and rewarding excellence, and that it wants to keep its attention on its national security mission.
Associate Attorney General Stanley Woodward Jr. said the resolution is the Justice Department's fourth False Claims Act settlement over alleged racial discrimination against employees.
A wider pattern
The EEOC under Lucas has concentrated on cases of discrimination against majority groups. In December she used social media to ask White men to come forward with claims of workplace discrimination.
The False Claims Act, which targets false statements made to obtain government money, is also being used against federal contractors' DEI efforts. Earlier settlements include high-dollar deals with Accenture and Deloitte.
Source: HR Dive