Stephen Burbank, an independent arbitrator for the NFL, dismissed the team's grievance against Bennett, enabling him to keep the entire $6.3 million signing bonus, ProFootballTalk.com reported.
Green Bay abruptly waived Bennett on Nov. 8, citing a failure to disclose a medical condition designation. That decision to release Bennett, which was the first step in the team's plans to recover the signing bonus, wound up being the deciding factor in Burbank's ruling against the club.
Bennett signed with the New England Patriots two days later after he was claimed off waivers. It was revealed then that he had been playing with a torn rotator cuff.
Had the Packers kept Bennett, who was planning to undergo season-ending surgery, they could have pursued their grievance.
Instead, by allowing another team to take over Bennett's contract, Burbank ruled that Green Bay essentially forfeited any right to recoup the bonus.
Signed to a three-year, $21 million contract in the offseason, the 6-foot-6, 275-pound Bennett failed to find the end zone with Green Bay, finishing with 24 receptions for 233 yards.
He had six catches for 53 yards in two regular-season games for New England, and added 11 catches for 98 yards in three playoff games.