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The recent move by General Mills to impose mandatory arbitration on consumers using its website, downloading coupons and otherwise engaging with the company ended up causing somewhat of a public relations storm recently.   The timeline goes something like this:

  • April 15, General Mills posts its updated privacy policy online,Please note we also have new legal terms which require all disputes related to the purchase or use of any General Mills product or service to be resolved through binding arbitration.”
  • April 16, the New York Times features the story on the new arbitration policy with this lead-in, “Might downloading a 50-cent coupon for Cheerios cost you legal rights?”
  • April 17, General Mills tries to clarify its previous statement saying,  “that an update to its new legal policies, which stated that consumers ‘joining our online communities’ could not sue the company, did not apply to people who visit its Facebook pages and Twitter accounts.”
  • April 20, after a considerable uproar and much public attention, General Mills retracts the whole arbitration clause saying its terms and intentions were misunderstood.  (New York Times, 4/20/14)

What General Mills stated initially was that consumers who downloaded coupons, joined its online communities, or participated in promotions and sweepstakes were automatically agreeing to arbitration should a dispute arise. This was a move to take away consumers’ rights to sue the company – in other words, to eliminate any right to a jury trial by one’s peers, but instead use an arbitrator chosen from a list provided by General Mills to decide the merits.  If you suspect that your chances of a fair hearing might be diminished through arbitration, as opposed to the court system, you are very perceptive.  This move by General Mills is yet another example of a corporate screw-up, and perhaps screw-over.  On the simplest level it was a bad public relations campaign.

According to the New York Times, “the change in legal terms, which occurred shortly after a judge refused to dismiss a case brought against the company by consumers in California, made General Mills one of the first, if not the first, major food companies to seek to impose what legal experts call “forced arbitration” on consumers.”

General Mills, like other big food corporations, is worried about the rise in consumer class-action lawsuits. This move was about avoiding litigation. This is about corporations avoiding responsibility for truthful labeling, safe manufacturing practices, and marketing healthy food products.

Consumers need to read the fine print more often. But who joins a Cheerios sweepstake and thinks to read the pages of rules?  Or wants to?  It’s just a box of cereal, right? Consumers have rights but corporations are seeking ways minimize (or eliminate if they can) those rights, often using fine print on the unsuspecting.

General Mills has seen a number of legal battles in recent years. In 2013 it paid $8.3 million for lawsuits stemming from health benefit claims on packaging of Yoplait Yoplus yogurt. In 2012 it settled a case requiring removal of the word ‘strawberry’ from Strawberry Fruit Roll-ups—which, by the way, did not  contain strawberries. Currently there is legal action pending over General Mills’ claim that Nature Valley products are 100% natural. It is easy to understand why General Mills would like to eliminate consumers’ rights to sue.  Arbitrations are conducted privately, resulting in fewer fines and less negative publicity for the company – by an arbitrator chosen from a list provided by General Mills.  One wonders if that arbitrator, who has financial incentives for being on “the list”, has a strong desire to protect the consumer (the little guy), or does he or she prefer to remain on “the list” to continue to arbitrate General Mills’ cases?  Hmmm….

“Over the last probably two decades, the court [U.S. Supreme Court] has been moving in a very pro-arbitration direction, making it increasingly more difficult for everyday Americans to have their claims against corporations brought before a court of law,” says Elizabeth Wydra of the Constitutional Accountability Center.  Corporations like General Mills want to settle away from the public eye where they can minimize the damages and the financial responsibilities when things go wrong. They have the support of conservative Supreme Court judges, notably Justice Roberts, in making that possible.

You may criticize General Mills, as many folks done recently.  You may “un-Like” the company on Facebook, or blast it on Twitter. But the solution isn’t that simple. Corporations will always have more power than the consumer  – unless the we, the consumers, speak with our wallets.  In the interim, we have to keep pushing for our Seventh Amendment (it is indeed in the Bill of Rights) right to a jury trial.  The American Civil Justice System – the good old fashioned jury trial – remains one of the world’s (not only our country’s)  best ways to balance harms and force responsibility and accountability on a wrongdoer.   If we trust juries to impose the death penalty, or a life sentence on a convicted criminal, then we certainly may trust a jury to decide matters involving civil justice.  And, it is our Constitutional right to pursue civil justice when a wrong is done, even when we are talking about a box of Cheerios or a product with false or misleading health benefit claims.

One Comment

  1. Gravatar for bern meister

    Your lucky. In England the way the jury system works you can have jury members who are not even English or Christians or read English or even understand the laws of the land!They might vote against you just because they dont like what you have accused of!

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