Departed Employees Damages

In Layla’s Day Spa, Inc. v. HD Salon Group, LLC, the Fifth Court addressed the measure of damages in a business-purchase dispute involving the loss of key employees.

The trial court awarded damages based on gross revenue, using two models: one comparing average annual revenues before and after the loss of technicians, and another dividing average revenue by the number of technicians and multiplying by the number lost.

The Fifth Court reversed, emphasizing that “the calculation of lost-profit damages must be based on net profits, not on gross revenue or gross profits.” No. 05-24-00065-CV, May 21, 2025.