Earl Thomas' tenure with the Ravens came to an abrupt end on August 23. After a physical altercation with fellow safety Chuck Clark over a missed assignment in last Friday's practice, . He was told not to return to Baltimore's practice facility the following day. Thomas that led to the scuffle on Instagram, which has since been deleted, with an explanation of his side of the incident. "Personal conduct that adversely affected the Baltimore Ravens" was the reason given for terminating Thomas' contract when .
Thomas signed a four-year, $55 million contract containing $32 million of guarantees with the Ravens in 2019 free agency. The $32 million consisted of a $20 million signing bonus as well as 2019 and 2020 base salaries of $2 million and $10 million, both guaranteed for skill, injury and salary cap upon signing. Having these three types of guarantees are considered as fully guaranteed in an NFL contract.
There was widespread speculation that the Ravens would suspend Thomas for conduct detrimental, which would have allowed the Ravens to void the guarantee for $10 million, when he was kept away from the facility on Saturday. Guarantees in NFL contracts void for a laundry list of reasons (suspensions under a league policy or by the team for conduct detrimental, failing or refusing to play, practice or report to the team, etc.). The conditions vary depending on team convention, the attention the agent pays to the language and his/her leverage in negotiations. In some cases, fines can trigger the voiding on guarantees. A broad clause voiding guarantees for engaging in conduct reasonably judged by the team to adversely reflect on the organization is standard with some teams.
According to sources, the Ravens did not formally suspend Thomas for conduct detrimental to the team. Thomas' guarantees don't contain conduct language or reference fines as grounds for voiding.
The Ravens are going a different and highly unusual route to attempt to invalidate Thomas' $10 million base salary. Paragraph 11 of the NFL Player Contract with the heading "Skill, Performance And Contract" outlines circumstances for termination. The exact phrasing the Ravens gave as a reason for releasing Thomas in their announcement is contained in this paragraph.
A team must give a player written notice when he is released. The form used for termination provides reasons with five different boxes that can be checked, covering a failure to maintain satisfactory physical condition, failure to make a full disclosure of a physical or mental condition during a physical, lack of skill, personal conduct and for salary cap purposes.
Presumably, the Ravens checked the box for personal conduct with Thomas' release. The language with this box also mirrors the wording in Baltimore's statement and Paragraph 11.
Fully guaranteed is really a misleading term with NFL contracts. Essentially, the Ravens are trying to use a "loophole" of personal conduct to supersede Thomas' skill, injury and salary cap guarantees.
Thomas will undoubtedly file a grievance through the NFLPA to enforce the guarantees with the $10 million. Expect the NFLPA to be aggressive in pursuit of payment, as it wants to deter teams from releasing players under the guise of personal conduct when there may otherwise be a payment obligation and establish that owners' attempts to avoid payments to players will be met with resistance.
Thomas counted $15 million against Baltimore's salary cap prior to his release. The Ravens should temporarily pick up $10 million of cap space with the removal of Thomas' 2020 base salary. Once the grievance is filed, 40 percent of the disputed amount, or $4 million, will become a Ravens cap charge under NFL Collective Bargaining Agreement procedures relating to grievances. The Ravens will have a $10 million cap charge for Thomas next year regardless of the grievance's outcome relating to the $5 million of signing bonus proration that was attribute to the cap for 2021 and 2022.
A grievance may not be resolved until sometime in 2021. Had Thomas' contract contained the broad language for voiding his contract guarantees because of his conduct or actions, the Ravens would be in a stronger position on nonpayment of the $10 million.
The Ravens' ability to prevail could hinge on whether there is a documented pattern of unacceptable behavior by Thomas where he was either previously fined and/or given warnings. Thomas had a heated argument early last season with nose tackle Brandon Williams about him not suiting up for a game against the Browns that was on the verge of becoming physical. NFL Media's Mike Silver reported Thomas was fined last year on several occasions because of being late to or missing meetings. Thomas' lateness had started to resurface during training camp this year, according to Silver.
How the Ravens have handled other players who have engaged in unacceptable behavior, particularly conduct more egregious than that of Thomas, may be particularly relevant to an arbitrator. Thomas posting video from practice on Instagram will certainly be used against him by the Ravens.
In some instances, the sides will reach a settlement to avoid an unfavorable decision from the arbitrator. For example, the Ravens and running back Ray Rice settled the grievance he filed after his release early during the 2014 season when video surfaced of him hitting his wife in an Atlantic City casino elevator for $1,588,235 in 2015.
Thomas prevailing in the grievance would mean an additional $6 million of salary cap charges for the Ravens. Whether the charges would be in 2020 or 2021 would depend on the timing of the arbitrator's decision. Thomas' guarantees have an offset so Baltimore's obligation to him would be reduced by the amount of money he signed for this year with another team. The Ravens getting a favorable decision from the arbitrator would result in a $4 million cap credit from the 40 percent of the disputed amount being a cap charge while the grievance was pending.