The Falcons sought to recover the bonuses after Vick pleaded guilty to federal charges in a dogfighting operation. The bonuses were paid from 2004-07.
But U.S. District Judge David Doty of Minneapolis ruled that recovery of most of the bonus money by the Falcons would violate the NFL collective bargaining agreement. The agreement does not allow roster bonus money to be forfeited once it's been earned, the judge wrote.
Vick received a 23-month jail sentence and entered a minimum-security prison in Leavenworth, Kan., last month. The league has suspended Vick indefinitely without pay.
"It makes no sense that an individual who willfully violates his contract is entitled to be paid tens of millions of dollars even though he is in jail and providing no services whatsoever to his employer," NFL spokesman Greg Aiello said.
Vick's personal attorney, Lawrence Woodward Jr., said Vick was happy with the ruling but understands there could be appeals.
"He's grateful for some good news but he realizes he needs to keep doing all the right things to get back to playing football," Woodward said.
At a November hearing, union attorney Jeffrey Kessler contended Vick's "roster bonus" should be treated the same as a "performance bonus," which can't be forfeited under the agreement. The league maintained the roster bonus should be treated like a "signing bonus allocation," which could be forfeited.
"The Players Association is obviously delighted with the result," Kessler said. "It vindicates our view that a clear deal was made -- that once players earn their compensation that it is no longer subject to being taken back."
While the distinction about whether Vick's roster bonuses were guaranteed or not guaranteed may be important for salary cap purposes, Doty wrote, "it does not dictate the outcome in a forfeiture context."
Any money recovered would be credited to Atlanta's future salary cap.
Doty also ruled the Falcons may not use state law, even in a grievance procedure, to try to recoup Vick's bonus money.
"Any potential recovery would have only affected our 2009 salary cap," McKay said. "As to our future legal strategies, we will meet with our legal representatives to more fully understand our options before making that determination."
Copyright 2008 by The Associated Press