Lockheed Martin lawsuits span trade secret theft, securities fraud, government contract overbilling, retirement plan mismanagement, environmental contamination, employment discrimination, and arms export violations. The defense contractor and its subsidiaries have paid roughly $334 million in penalties across 106 enforcement actions since 2000, and several active cases filed in 2025 and 2026 seek billions more.1Good Jobs First. Violation Tracker – Lockheed Martin Here is what each of the major cases alleges and where it stands.
SDR Group’s $4.25 Billion Trade Secret Suit
On March 13, 2026, the law firm Napoli Shkolnik filed a $4.25 billion federal lawsuit against Lockheed Martin on behalf of SDR Group (Sustainable Development Resources, LLC) in the U.S. District Court for the Eastern District of Virginia. The case, numbered 1:26-cv-646, names eight co-defendants alongside Lockheed, including AT2 Aerospace, Straightline Aviation Limited, Knight Aerospace, and Niagara Gravity Consulting.2Napoli Shkolnik PLLC. Napoli Shkolnik Files $4.25 Billion Lawsuit Against Lockheed Martin on Behalf of SDR Group
SDR Group had developed a multi-sensor geophysical surveying system designed to be deployed on Lockheed Martin’s hybrid airship. The system used proprietary sensor integration architecture and a commercialization strategy built around defense offset credits, aimed at mapping strategic mineral resources like lithium, cobalt, and rare earth elements. According to the complaint, SDR shared its designs, deal pipeline, and proprietary data with Lockheed under confidentiality agreements. The lawsuit alleges Lockheed employees, consultants, and suppliers who served as trusted advisors to SDR covertly misappropriated the business model to launch a competing venture, AT2 Aerospace, and then cut SDR out of a $3.4 billion deal Lockheed had originally proposed.3Yahoo Finance. Lockheed Martin Faces $4.25 Billion Lawsuit
The claims include violations of the federal Defend Trade Secrets Act of 2016 and the Virginia Uniform Trade Secrets Act, along with breach of confidentiality agreements, breach of fiduciary duty, fraudulent inducement, tortious interference, and unjust enrichment. SDR Group is seeking a permanent injunction, the return or certified destruction of its protected materials, and monetary damages. The case remains in its early stages.2Napoli Shkolnik PLLC. Napoli Shkolnik Files $4.25 Billion Lawsuit Against Lockheed Martin on Behalf of SDR Group
Securities Class Action After $1.6 Billion in Contract Losses
On July 22, 2025, Lockheed Martin’s stock fell nearly 11% in a single day after the company disclosed $1.6 billion in pre-tax losses for the second quarter. The largest component was a $950 million charge tied to a classified Skunk Works aeronautics program, attributed to design, integration, and test challenges. Another $570 million came from the Canadian Maritime Helicopter Program. It was the steepest single-day drop for the company since October 2021.4Bloomberg Law. Lockheed Investor Sues After Profit Hit by Classified Program
Six days later, investor Muhammad Khan filed a securities class action in the Southern District of New York, case number 1:25-cv-06197. Brought under the Securities Exchange Act of 1934, it covers purchases of Lockheed stock between January 23, 2024, and July 21, 2025.5CourtListener. Khan v. Lockheed Martin Corporation The complaint alleges Lockheed executives overstated the company’s ability to deliver on contract commitments and failed to disclose that the company lacked effective internal controls for evaluating program requirements, technical risks, and profit booking rates.6Rosen Legal. Lockheed Martin Corporation
The lawsuit points to a series of damaging disclosures: an $80 million loss on a classified program in October 2024 that sent the stock down 6%, a $1.7 billion pre-tax loss in January 2025 that triggered a 9% decline, and finally the July 2025 earnings call.7Texas Public Radio. Lockheed Martin Sued Over Billions in Reported Losses The defendants have filed a motion to dismiss the amended complaint, and the case remains active.8PACER Monitor. Khan v. Lockheed Martin Corporation et al
401(k) Plan Lawsuits Under ERISA
In March 2025, current and former employees filed a proposed class action in the U.S. District Court of Maryland alleging Lockheed violated its fiduciary duties under the Employee Retirement Income Security Act in managing three retirement plans holding a combined $50 billion in assets.9BenefitsPRO. Lockheed Martin Sued for Using Underperforming Funds With High Fees in Its 401(k) Plan The complaint, Fezer et al v. Lockheed Martin Corporation et al, alleges Lockheed steered approximately 140,000 participants into proprietary target-date funds managed by its subsidiary, Lockheed Martin Investment Management Co. Those in-house funds were the only target-date option available and the default investment for employees who did not choose otherwise. Plaintiffs allege the funds were two to five times more expensive than comparable offerings from firms like Vanguard and underperformed independent alternatives by 0.41% to 1.37% annually over the last decade, costing participants hundreds of millions of dollars since 2019.10PlanSponsor. Lawsuit Against Lockheed Martin Criticizes Firm for Using In-House TDFs A Lockheed spokesperson declined to comment on the ongoing litigation.11PlanAdviser. Lockheed Martin Sued Over In-House Management of 401(k) Plan
Lockheed faced a similar suit before. In Abbott v. Lockheed Martin, retirement plan participants alleged the company invested savings in funds with excessively high fees and allowed excessive recordkeeping costs. After eight years of litigation in the Southern District of Illinois, Lockheed agreed to a $62 million settlement in 2015, which at the time was described as the largest of its kind against a single employer. The plan involved roughly $27 billion in assets and 180,000 participants. Lockheed denied the allegations.12Retirement Income Journal. Lockheed Martin’s $62 Million ERISA Settlement Approved
Government Contract Fraud Settlements
Lockheed Martin and its subsidiaries have paid more than $233 million across 17 False Claims Act and related government-contracting cases since 2000, the company’s single largest category of legal liability by dollar amount.1Good Jobs First. Violation Tracker – Lockheed Martin
Sikorsky Support Services — $70 Million
In June 2024, Lockheed subsidiaries Sikorsky Support Services Inc. and Derco Aerospace Inc. agreed to pay $70 million to resolve allegations that they ran an illegal cost-plus-percentage-of-cost subcontracting arrangement. According to the Department of Justice, Sikorsky purchased spare parts for Navy trainer aircraft from Derco at cost plus a fixed 32% markup, then sought full reimbursement from the Navy without disclosing the subcontract. Congress has long banned cost-plus-percentage-of-cost contracting because it incentivizes contractors to drive up costs.13U.S. Department of Justice. Sikorsky Support Services Inc. and Derco Aerospace Inc. Agree to Pay $70M to Settle False Claims Act The case originated as a whistleblower suit filed in 2011 by Mary Patzer, a former Derco employee.14U.S. Attorney’s Office, Eastern District of Wisconsin. Sikorsky Support Services Inc. and Derco Aerospace Inc. Agree to Pay $70 Million to Settle
F-35 Defective Pricing — $29.74 Million
In February 2025, Lockheed agreed to pay $29.74 million to settle allegations that between 2013 and 2015 it inflated pricing proposals on five F-35 production and sustainment contracts by failing to provide accurate supplier cost data to the Joint Program Office. The government alleged this violated both the Truth in Negotiations Act and the False Claims Act. That was on top of $11.3 million Lockheed had already paid to the Department of Defense over the same contracts.15U.S. Department of Justice. Lockheed Martin Corporation Agrees to Settle False Claims Act Allegations of Defective Pricing Patrick Girard filed the whistleblower suit in 2017 in the Eastern District of Texas.
Inflated Subcontractor Costs — $15.85 Million
In 2012, Lockheed paid $15.85 million to settle allegations that it passed along inflated costs for perishable tools used on the F-22 and F-35. The inflation originated from a pricing scheme by subcontractor Tools & Metals Inc. (TMI), whose former president, Todd B. Loftis, had pleaded guilty in 2005 and received a seven-year prison sentence. The government alleged Lockheed acted recklessly by failing to oversee TMI’s billing. Whistleblowers Robert Spencer and John Becker shared $2 million of the recovery.16U.S. Department of Justice. Lockheed Martin Corporation Reaches $15.85 Million Settlement With U.S. to Resolve False Claims Act
Ferguson Subcontractor Labor Suit Revived
In a related matter, former Lockheed Director of Internal Audit Maria Del Carmen Gamboa Ferguson filed a whistleblower suit alleging Lockheed knowingly incorporated fraudulently inflated subcontractor labor costs across multiple aircraft programs, including the C-130J, F-35, F-22, and F-16. A district court dismissed the case under the False Claims Act’s “first-to-file” bar, reasoning that Girard’s earlier case covered the same ground. In March 2026, the Fifth Circuit reversed that dismissal, holding that Ferguson’s allegations about subcontractor labor inflation were a different type of fraud from Girard’s bulk-billing scheme. The case was remanded.17FindLaw. United States ex rel. Ferguson v. Lockheed Martin Corp.
Environmental Contamination at the Orlando Weapons Facility
Lockheed Martin’s Orlando weapons manufacturing facility, operating since 1957, has drawn multiple lawsuits alleging decades of improper chemical storage and disposal contaminated surrounding soil, air, and groundwater. Grayson v. Lockheed Martin Corporation (Case No. 6:20-cv-01770), filed in September 2020, alleged the facility stored toxins in leaking tanks, transported waste through leaking underground pipes, and dumped thousands of tons of toxic sludge into unlined trenches. The contaminants identified include trichloroethylene (TCE), tetrachloroethylene (PCE), vinyl chloride, benzene, PFAS, DDT, cadmium, chromium, and lead. Groundwater testing reportedly showed TCE at 386,000 parts per billion and methylene chloride at 213,600 parts per billion, against EPA regulatory limits of 5 parts per billion.18ClassAction.org. Lockheed Martin Hit With Lawsuit Over Toxic Contamination at Orlando Facility
More than 60 individuals who lived or worked near the facility separately filed negligence and strict liability suits alleging exposure to TCE, PCE, and styrene caused cancers including breast cancer, thyroid cancer, and leukemia, along with neurological diseases including multiple sclerosis and Parkinson’s. A Florida federal judge excluded the plaintiffs’ expert testimony in 2023 and 2024, effectively gutting the cases. The plaintiffs appealed to the 11th Circuit, which held a hearing in January 2026. During oral arguments, one judge expressed skepticism about the reliability of the expert reports while another questioned whether complete exclusion was the right remedy. No decision has been issued.19Courthouse News Service. People Sickened Near Lockheed Martin Site Demand Second Chance at Suit
A third group, three families alleging the facility caused birth defects in their children, went to trial in Benjamin Johnson et al v. Lockheed Martin Corporation (Case No. 6:21-cv-01363). On May 29, 2026, a Florida federal jury returned a verdict for Lockheed Martin, finding the company’s chemical handling practices did not cause the alleged injuries. The families have appealed to the 11th Circuit.20Law360. Lockheed Beats Families’ Birth Defects Suit at Trial
Lockheed also holds environmental responsibility for a former Martin-Marietta aluminum reduction facility in The Dalles, Oregon, listed as a Superfund site in 1987. Although the site was removed from the Superfund priority list in 1996 after waste was consolidated into an on-site landfill, contamination remains, and the EPA requires Lockheed to maintain groundwater monitoring and controls preventing contaminated groundwater from being used as drinking water.21Lockheed Martin. Five-Year Review Fact Sheet – The Dalles
Age Discrimination Cases
In May 1994, the Equal Employment Opportunity Commission sued Martin Marietta Corporation, Lockheed Martin’s predecessor, for violating the Age Discrimination in Employment Act. The EEOC alleged the company targeted employees aged 40 and older for mass layoffs and forced retirements between 1990 and 1994, primarily affecting non-union workers at its Astronautics Group and Information Systems Group in Colorado.22EEOC. EEOC and Martin Marietta (Lockheed Martin) Settle Major Class Action Lawsuit
A consent decree received preliminary court approval in November 1996. Lockheed agreed to pay $13 million in back pay to roughly 2,000 former employees and to rehire at least 450 of the laid-off workers. The company also agreed to provide free outplacement services for two years, offer up to eight college-level retraining courses, and retrain managers on nondiscriminatory decision-making. The EEOC monitored compliance for five years. Lockheed did not admit discrimination.23Los Angeles Times. Martin Marietta Settles Age Discrimination Suit
In a separate age discrimination case, a jury awarded plaintiff Howell $915,288 after trial. Howell, a former employee with approximately 35 years of service, received damages for past lost income, future lost pension benefits, and emotional distress. The parties later reached a confidential settlement and the jury’s judgment was vacated.24Bailey Glasser LLP. Howell v. Lockheed Martin Corporation et al
Arms Export Control Violations
Lockheed Martin has paid $15 million across three settlements with the State Department’s Directorate of Defense Trade Controls for violations of the Arms Export Control Act and the International Traffic in Arms Regulations (ITAR).1Good Jobs First. Violation Tracker – Lockheed Martin The largest, an $8 million penalty in 2000, preceded a 2008 settlement of $4 million (with $1 million suspended for compliance measures). The 2008 case involved two sets of unauthorized exports: one related to a proposed sale of Hellfire missiles to the United Arab Emirates, including unauthorized export of classified technical data, and another involving unauthorized export of classified information about the Joint Air-to-Surface Standoff Missile. Lockheed was required to appoint a special compliance official, review its ITAR compliance infrastructure, and submit to an independent audit.25U.S. Department of State. Lockheed Martin Corporation ITAR Settlement
The Running Total
Separate from private and criminal litigation, Lockheed Martin is contesting a $4.6 billion income tax liability asserted by the IRS, related to an accounting method change. The company is accruing $100 million in interest while the dispute remains unresolved.26KERA News. Lockheed Martin Sued Over Billions in Reported Losses
Across all categories, the Violation Tracker database maintained by Good Jobs First records roughly $334 million in penalties against Lockheed Martin and its subsidiaries across 106 enforcement actions since 2000. Government contracting offenses account for the largest share at $234 million, employment-related violations $78.5 million, competition and export control penalties $15 million, and environmental violations $5.6 million.1Good Jobs First. Violation Tracker – Lockheed Martin With the SDR trade secrets case, the securities class action, the Fezer ERISA suit, the revived Ferguson qui tam, and the Orlando appeals all unresolved, the total is likely to grow.