The 23-year-old, who joined Leeds aged nine, is out of contract this summer.
However, as he is under 24, any club he signs for would have to pay Leeds a fee related to his development.
Albion boss Tony Pulis said: "A tribunal could put an extraordinary amount of money on it and you're stuck with it. It's a risk that, at this moment, is not worth taking."
It has been reported that the Baggies have offered £3.5m in compensation for the player, who became the subject of disciplinary proceedings after refusing to play in the club's final league match of the season at Wigan.
The Leeds player of the season in 2015-16 is understood to have been fined two weeks' wages for his refusal to play.
Regarding the compensation figure for the left-back, Pulis added: "We wanted to find out what the price was to see if we'd be interested.
"If it's going to go to tribunal, we don't know what the price is and I think that takes us out of the game."