Former Carolina Panthers head coach Matt Rhule filed an arbitration suit last week against the franchise, sources tell CBS Sports. The suit claims the Panthers are refusing to pay Rhule's severance compensation following his firing from Carolina and subsequent hiring at the University of Nebraska.
In the suit, which was filed with the NFL on Jan. 25, Rhule seeks to receive the offset money he claims is due to him from the Panthers. According to sources, the suit doesn't allege specifically how much money Rhule is seeking, but contract terms indicate there's roughly $5 million in dispute.
Employment attorney John Singer filed the suit on behalf of Rhule with the league office. When reached for comment, Singer said: "We have no comment."
A Panthers spokesman declined comment Tuesday. The NFL also declined comment.
Nearly all disputes between coaches and NFL teams go to arbitration, per the terms of their contracts. The NFL can appoint an arbitrator to hear the dispute, or it can send the case to JAMS, a commercial arbitration firm the league regularly uses.
In January 2020, Rhule signed a seven-year contract worth more than $60 million that would pay him an annual base salary of $8.5 million through the 2026 NFL season.
On Oct. 10, 2022, just five weeks into Rhule's third season with the Panthers, team owner David Tepper fired Rhule. He went 11-27 as Carolina's head coach, including a 1-4 start to the season, while being unable to secure a franchise quarterback in his nearly three years there.
Around Thanksgiving of 2022, Rhule accepted the offer to become the next head coach of Nebraska, hoping to turn around the fortunes of the Cornhuskers like he had at Temple and Baylor before jumping to the NFL.
Rhule signed an eight-year contract with Nebraska that pays $74 million in base salary along with $4 million more in deferred salary if he remains employed by the school across various vesting dates.
Whereas Rhule's contract with Carolina had a consistent base salary of $8.5 million each year, the Nebraska contract escalates each year -- from $5.5 million in the first year to $12.5 million in the final year of the deal.
According to a source, the Panthers will argue that Rhule's Nebraska contract violates the league's anti-tampering policy. Section 3, Article D of the policy under "CONTRACT WITH NEW CLUB/REASONABLENESS" reads:
"If the contract with the new club includes a substantial salary increase in new contract years, the Commissioner shall use the following as a guideline to determine the reasonableness of those increases: (i) if annual compensations is scheduled to increase by 20 percent or more for the new contract years, the prior club's annual offset, if that club is entitled to an offset, shall be calculated based upon the employee's average annual compensation during the entire term of contract."
The argument is that Rhule's Nebraska contract has an unreasonable increase of greater than 20 percent when factoring in deferred salary and other benefits. Though the league's anti-tampering policy makes no reference to college coaching jobs, the policy also does not make an explicit distinction as to what it means by "club."
A conclusion to the arbitration suit should be reached in the coming weeks, according to a source.
It's unclear how much money the Panthers paid Rhule to this point, but from Feb. 1, 2023 through Jan. 31, 2027, he was due $34 million in base salary. Rhule's Nebraska contract pays him a total of $29 million (base salary plus $1 million in deferred compensation) from the Nov. 2022 start date through Dec. 31, 2026. Using those date ranges, one can estimate a difference of about $5 million in salary between the two contracts running through nearly the same amount of time.
This isn't the first contract dispute Panthers owner David Tepper has faced. Last March, Tepper's real estate company halted construction on an $800 million team headquarters and practice facility in Rock Hill, S.C., after disputes over bonds being issued for the project.
The real estate company, GT Real Estate Holdings, filed for bankruptcy in the summer. In December, a federal judge approved a $101 million settlement that would end a saga that began in 2018. According to the Associated Press, Tepper's real estate company had to pay $60 million to contractors, $21 million to the county and another $20 million went to Rock Hill.
On Tuesday, the Panthers introduced new head coach Frank Reich, who reportedly signed a four-year contract with Carolina.
Tepper took questions from local reporters after the introductory press conference, and he called the process used in hiring Rhule a "mistake."
"I made this mistake," Tepper said. "I think it's a mistake to have a CEO-type head coach. OK? That's a mistake, just in general. That's what I kind of believe. So I think you want to get somebody who's really good on offense or really good on defense."
This story was updated with additional sourcing.
