Huong Que, Inc. v. Luu, 150 Cal. App. 4th 400 (2007)

After Mui Luu and Cu Tu Nguyen sold Huong Que, Inc. (the “most well known, recognized and trusted brand name for traditional style Vietnamese calendars”) to Con Tu, they agreed to remain employed as the company’s “managing agents.” The sales agreement contained a covenant not to compete whereby Luu and Nguyen agreed not to engage in the publishing business “except for publishing Buddhist bible and book.” After the sale, Con Tu discovered an email exchange with a third party in which Luu attached Huong Que’s customer list and discussed forming a new calendar publishing company to be named “Pro Calendar.” Con Tu filed suit alleging breach of contract, breach of the duty of trust and loyalty, misappropriation of trade secrets and tortious interference with Huong Que’s economic advantage. The trial court enjoined defendants (including several individuals associated with Pro Calendar) from: using the Huong Que customer list; distributing calendars to those customers; soliciting business from them; and selling competing calendars to them. The Court of Appeal affirmed the preliminary injunction after concluding the trial court correctly forecast probable success by Huong Que on its claims for breach of the duty of loyalty and tortious interference with prospective economic advantage. Cf. Payment Systems, Inc. v. Walczer, 2007 WL 1805066 (Cal. Ct. App. 2007) (customer non-solicitation covenant is enforceable in connection with partnership dissolution); H.B. Fuller Co. v. Doe, 2007 WL 1559542 (Cal. Ct. App. 2007) (trial court ordered to unseal documents filed in connection with company’s subpoena of Yahoo! to determine the identity of employee who posted confidential information on the Internet).