The dispute over whether former football coach June Jones owes the University of Hawai'i $400,008 for the early termination of his contract is apparently at an impasse and headed to binding arbitration.

Leigh Steinberg, Jones' agent, said, "the matter is in the first stages of being submitted to an arbitrator."

The school is asking Jones to pay liquidated damages of $400,008 — half his annual UH paycheck — for terminating their five-year agreement before its contracted June 30, 2008 expiration date.

Jones left UH six days after the Warriors' Jan. 1 Sugar Bowl loss to Georgia to become head coach at Southern Methodist University, where he reportedly more than doubled his annual UH pay of $800,016.

A clause in his last UH contract, signed in 2003, provides for $400,008 in liquidated damages "if he terminates this agreement prior to June 30, 2008." Though Jones received $800,016 per year from UH, the school said half of it was paid by donations.

The contract specifies payment within 60 days of departure, meaning it was due March 7, 2008.

But Steinberg said, "We had an explicit agreement with Herman Frazier that, after three years, there would be no penalty if coach Jones were to leave the university. If that were not the case, coach Jones would always honor a contractual obligation."

UH has claimed that the original contract is unchanged with no record on file allowing an early exit without liquidated damages. Frazier was terminated a day after Jones' departure for SMU and has not been available for comment.

Two local attorneys who have reviewed a file copy of the contract but who were not privy to negotiations said that, based upon the contract, they believe UH has a claim on the money.

The contract said Jones was prohibited from accepting employment "under any circumstances as a men's football coach at any institution of higher education which is a member of the NCAA, or for any men's football team participating in any professional league or conference in the United States ..." prior "to the expiration date of the term of this agreement ... without first obtaining a written release or a negotiated settlement."

The contract states that "in the event the university releases coach of his obligations under this agreement, coach shall be responsible for paying to the university liquidated damages ..."

Manoa Chancellor Virginia S. Hinshaw has turned the matter over to the university's general counsel, according to Gregg Takayama, communication director for the Chancellor's Office. "It is out of the chancellor's hands."

The counsel's office did not return calls to The Advertiser.

Michael F. Nauyokas, a Honolulu attorney specializing in mediation, arbitration and employment and labor law, said after reviewing relevant portions of Jones' file agreement but not party to negotiations surrounding the contract, "it looks like he (Jones) promised to pay the money, now owes it and is past the 60 days due date for payment and is, therefore, in breach."

Jeff Portnoy, a Honolulu attorney, radio call-in sports host and Advertiser blogger, said, "Based upon the contract alone, Jones owes the University $400,008 in liquidated damages for taking another head college coaching job prior to the expiration of his contract on June 30, 2008. The contract does also provide that he could not accept another college coaching job without first receiving a written release from UH, or a negotiated settlement in writing ... But even with a release, he owes the $400,008."

The issue goes to arbitration because a clause in the contract notes: "Any disputes between (the) university and (the) coach shall be decided in a final and binding arbitration. The parties shall mutually agree to an arbitrator. If no agreement on an arbitrator can be reached, then either party may apply to the first circuit court of the State of Hawai'i for the appointment of an arbitrator. The arbitrator's fee shall be split equally between the parties. Each party shall bear their own attorney's fees and costs."