Kaepernick, 31, filed a collusion grievance against NFL owners in October 2017 after going unsigned as a free agent through the fall of that season, following his decision to opt out of a contract with the San Francisco 49ers.
The NFL's collective bargaining agreement, which governs such disputes, makes clear that failure to sign a player is not in itself enough to prove collusion. Instead, a player would need evidence to show that teams worked together, rather than decided individually, to keep him out of the league.
Kaepernick has been unable to find a team to play for ever since and many experts attribute his political activism, which triggered a movement that drew the ire of U.S. President Donald Trump, as the key reason teams are wary of signing him.
The settlement also included Carolina Panthers safety Eric Reid, who was the first player to join former 49ers teammate Kaepernick in kneeling during the national anthem to protest against social injustice and police brutality.
The NFL Players Association (NFLPA) said it supported the decision by the players and their counsel.
"We continuously supported Colin and Eric from the start of their protests, participated with their lawyers throughout their legal proceedings and were prepared to participate in the upcoming trial in pursuit of both truth and justice for what we believe the NFL and its clubs did to them," the NFLPA said in a statement.
"We are glad that Eric has earned a job and a new contract, and we continue to hope that Colin gets his opportunity as well."
While player protests during the anthem subsided in the season that just ended, the issue came up last month when Commissioner Roger Goodell said Kaepernick was not the victim of a coordinated effort by owners to bar him from playing, but rather just not a good fit for any of the 32 teams.
Kaepernick led the 49ers to the Super Bowl game in 2013, but has not suited up since the 2016 season.
(Reporting by Peter Szekely in New York and Frank Pingue in Toronto; Editing by Jeffrey Benkoe and Susan Thomas)
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