When Two Agreements Become One: Lessons from Cross Country Staffing and California Civil Code Section 1642

When Two Agreements Become One: Lessons from Cross Country Staffing and California Civil Code Section 1642

Note: This post focuses only on the portion of the court’s opinion dealing with contract interpretation under Civil Code section 1642. It does not address the ruling on unconscionability or the court’s decision not to sever unenforceable terms.

California law recognizes that employment relationships are often built on more than one document. A recent decision involving Cross Country Staffing drives home a fundamental principle of contract law that employers should not overlook. Even if two documents appear separate, they can and often will be read together if they form part of the same transaction. That is the heart of Civil Code section 1642, and it was the basis for the court’s ruling against Cross Country’s attempt to enforce arbitration.

The Case and the Contracts

Cross Country Staffing had its employees sign two documents during the hiring process: an arbitration agreement and a broader employment agreement. The arbitration agreement required all disputes to be resolved in binding arbitration. The employment agreement, however, included a supersession clause and allowed for some disputes, especially those involving employee misconduct, to go to court.

When a dispute arose, Cross Country tried to compel arbitration. The trial court said no. It read the two agreements together and found that the arbitration clause did not apply to all claims because the employment agreement carved out exceptions.

What Civil Code Section 1642 Says

California Civil Code section 1642 provides that “several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together.” This provision codifies a longstanding rule in California contract law. Courts apply it to ensure that all writings executed as part of a single business deal are read together to determine the parties’ full intent.

In this case, the court found that both documents were between the same parties, executed during the same hiring process, and addressed the same general subject matter—how disputes between employer and employee would be resolved. That was enough to invoke section 1642 and read the arbitration and employment agreements together.

Employer Arguments Rejected

Cross Country argued that the agreements should not be read together unless they explicitly referenced one another or were dependent on each other. The court disagreed. Section 1642 does not require such formality. What matters is the context: same parties, same transaction, and overlapping subject matter.

Cross Country also claimed that the arbitration agreement and the employment agreement contradicted each other. But the court found that even if they did, that conflict was resolved by the employment agreement’s supersession clause. It is not unusual for one agreement to make exceptions to another. That is what happened here.

Lastly, Cross Country pointed to an integration clause in the employment agreement. But the integration clause only appeared in the employment agreement, not the arbitration agreement. So the court reasoned that the integration clause did not prevent the two documents from being read together under section 1642.

Why This Matters for Employers

Many employers use separate documents for different parts of the employment relationship, such as offer letters, arbitration agreements, confidentiality policies, and handbooks. That approach is not inherently wrong, but it carries risk if those documents overlap or conflict. If a dispute arises, courts may read them together under section 1642, just like the court did here.

That means:

• Do not assume a standalone arbitration agreement will stand alone. If another agreement signed at the same time contradicts it, courts will read them together.

• Pay attention to supersession and integration clauses. These clauses can either clarify or confuse the relationship between documents. Courts give them weight but will still look at the total transaction.

• Keep consistency across agreements. If the arbitration agreement says all disputes go to arbitration but the employment agreement says some go to court, be ready to have a judge decide which controls.

Final Takeaway

Cross Country Staffing offers a clear reminder. In California, courts will not let employers cherry-pick contract terms in isolation. If your agreements are part of the same hiring transaction, expect the court to read them together. Under Civil Code section 1642, the form of your documents may matter less than the substance of the transaction.

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This publication is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal or financial advice, nor do they necessarily reflect the views of Lido Law Group, APC, or any of its attorneys other than the author(s). This publication is not intended to create an attorney-client relationship between you and Lido Law Group, APC. Substantive changes in the law subsequent to the date of this publication might affect the analysis or commentary. Similarly, the analysis may differ depending on the jurisdiction or circumstances. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.