I am not sure why you're suggesting him to open a paypal dispute, it's not like he paid them that money for a service or product which he did not received. They owe him $325 which he earned by promoting affiliate offers available through their network.
Take a look at this link :
http://www.consumersonline.gov.au/content/ACH/ and see if you can find any organisation which will take up your complaint. If not then move on, but in the future never use a advertising or affiliate network without checking references first.