Cross Country Staffing, Inc. is a “comprehensive health care staffing company” that “recruits and places healthcare professionals in virtually every specialty and area of experience in hospitals globally.” Plaintiffs Isabel Silva, Alejandro Garcia, and Janai Velasco are all former or current employees of Cross Country Staffing.

At the time plaintiffs started their employment with Cross Country Staffing, each signed the same two contracts – namely, (1) an “Arbitration Agreement” and (2) an “Employment Agreement.”

In August 2023 plaintiffs filed a lawsuit alleging putative class and representative claims for (1) failure to pay wages (in violation of Labor Code sections 204, 510, 1182.12, 1194, 1194.2, 1197, 1197.1, and 1198), (2) failure to provide meal periods (in violation of Labor Code sections 512 and 226.7), (3) failure to provide rest periods (in violation of Labor Code section 226.7), (4) failure to reimburse business expenses (in violation of Labor Code section 2802), (5) failure to provide accurate itemized wage statements (in violation of Labor Code section 226), (6) waiting time penalties (under Labor Code sections 201 through 203), (7) unfair competition (under Business and Professions Code section 17200), and (8) violations of PAGA (under Labor Code section 2698 et seq.).

Cross Country Staffing filed a motion to compel arbitration. In its moving papers, Cross Country Staffing included only the Arbitration Agreement; it did not include, or make any mention of, the Employment Agreement. Plaintiffs opposed the motion, arguing that the Arbitration Agreement must be read together with the Employment Agreement, and that the Arbitration Agreement when read with the Employment Agreement was unconscionable and hence unenforceable in its entirety.

The trial court issued a 10-page order denying Cross Country Staffing’s motion to compel arbitration. First, the court ruled that it would read the Arbitration Agreement in light of the Employment Agreement because “both [were] executed on a single day as part of the employee’s hiring, and [because] both . . . govern dispute resolution as part of the overall employment relationship. Because the unconscionability rendered the entire Arbitration Agreement unenforceable, the court denied Cross Country Staffing’s motion to compel arbitration.

The Court of Appeal affirmed the trial court’s order in the published case of Silva et al. v. Cross Country Healthcare, Inc. et al. -B337435 CA2/5 (June, 2025).

Cross Country Staffing challenges the trial court’s order denying its motion to compel arbitration. The review on appeal entails three questions: (1) Did the trial court correctly construe the Arbitration Agreement together with the Employment Agreement; if so, (2) did the trial court correctly conclude that the Arbitration Agreement is unconscionable; and if so, (3) did the trial court abuse its discretion in declining to sever the unconscionable terms and, instead, in declaring the Arbitration Agreement unenforceable?

Civil Code section 1642 provides that “[s]everal contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together.”

“The recent decision in Alberto v. Cambrian Homecare (2023) 91 Cal.App.5th 482, is directly on point. In that case, the plaintiff signed two contracts as part of the hiring process namely, (1) an arbitration agreement, and (2) a confidentiality agreement.”

“Invoking section 1642, the appellate court in Alberto had “no difficulty concluding” that the two agreements “should be read together” because “both [were] separate aspects of a single primary transaction—[the employee’s] hiring” and “both governed, ultimately, the same issue—how to resolve disputes arising between [the employee] and [the employer] arising from . . . employment.” (Id. at pp. 490- 491.) “Failing to read them together,” the court in Alberto continued, “artificially segments the parties’ contractual relationship” and “fails to account for the overall dispute resolution process the parties agreed upon.” (Id. at p. 491.)

“Substantial evidence supports the trial court’s finding that section 1642 applies such that the Arbitration Agreement must be read together with the Employment Agreement.”

“We agree with Alberto, and publish to reject the further defenses raised by the employer in this case to what we view as an indefensible end-run around precedent. We accordingly affirm the trial court’s order finding the employer’s arbitration agreement unenforceable and denying the employer’s motion to compel arbitration.”