The settlement, announced Wednesday, January 2, is the biggest award ever obtained by the Equal Employment Opportunity Commission on behalf of an individual in a racial discrimination case. The consent decree reached with Lockheed has been filed in the U.S. Court for the District of Hawaii and is subject to the court’s approval.

In addition to the payment to Charles Daniels, an African-American avionics electrician who worked for the company from September 1999 to August 2001, Lockheed fired or barred from rehiring the team leader and four co-workers who verbally abused him. The company also agreed to establish a special anti-discrimination training program at its aircraft logistics centers.

The investigation and litigation took six years. But the long journey resulted in an outcome that likely will grab the attention of the corporate world.

“The EEOC hopes the settlement will send a message that racial harassment and discrimination will not be tolerated,” said William Tamayo, EEOC regional attorney for San Francisco. “We hope that Lockheed Martin will set a new tone in the industry.”

The company, however, accuses the EEOC of distorting the facts of the case. Daniels and the agency said his co-workers told him, “We should do to blacks what Hitler did to the Jews” and threatened to lynch him.

Those incidences didn’t come up in internal investigations.

“We couldn’t find any reference to those words being used,” said Joe Stout, director of communications for Lockheed Martin Aeronautics Co.

In a statement, the company stressed that the alleged conduct “involved a small number of first-line employees in a small, single operating unit of the company.”

Stout said that the consent decree is not an admission of guilt.

“We did not settle because we felt we had liability,” Stout said. “If this had proceeded to trial the facts would have substantiated that the company took the matter seriously, investigated and implemented appropriate remedial actions given the facts that had been reported.”

The case arose despite Lockheed’s no-tolerance policy on racial discrimination. The trouble started when one of Daniels’ colleagues lashed out against him following a decision by South Carolina to remove the Confederate flag from the Statehouse. Daniels, a Navy veteran, was part of a team that serviced military aircraft in Florida, Washington state and Hawaii.

“He decided to take it out on the first black person he saw, which was me,” Daniels said in a conference call with the media.

The situation escalated as the team moved from location to location. “It was pretty humiliating,” he said. “I was probably one of the highest-paid and top electricians at Lockheed at the time.”

The bullying became more sinister on Whidbey Island, Washington. While the team worked there, Daniels’ colleagues hinted that they could easily kill and dispose of him.

They said that “they could put my body 10 feet away from the road and I never would be found,” according to Daniels.

When he approached the Lockheed HR department, he was rebuffed, Daniels said. Officials waved off the discrimination, saying “boys will be boys,” and warned Daniels not to prosecute the company. They also continued assigning Daniels to the same team and eventually laid him off.

“They really just want to see if they can chase you away,” Daniels said. “I really didn’t expect [justice] after Lockheed Martin told me, ‘We never lose.’ ”

So, on his second-to-last day of work at Kaneohe Marine Corps Air Station in Hawaii, he filed a discrimination charge with the EEOC office in Honolulu.

“It takes an act of courage to stand up to the largest military contractor in the world and say that I have rights as a human being,” said Raymond Cheung, an EEOC attorney who led the government’s case.

This kind of case is becoming more prevalent at the EEOC. The number of racial harassment charges filed with the agency has risen from 3,075 in fiscal year 1991 to about 7,000 last year. In February 2007, the agency launched a national education and enforcement campaign to eliminate racial bias.

“We hope that this settlement bolsters the [EEOC] chairwoman’s initiative to deal with racial discrimination in the workplace,” Tamayo said.

Daniels’ attorney Carl Verady urged people who are suffering from discrimination to turn to the EEOC rather than their company for help.

“EEO internal processes turn out to be a cover-up … or a vehicle for the human resources people to expose the complainant,” Verady said. “Go to the EEOC. That is where your protection lies.”

Stout asserts that Lockheed embraces diversity.

“It is one of our core values,” he said. “We spend a great deal of time educating our workforce about it.”

—Mark Schoeff Jr.