Posted On: April 17, 2014 by Nancy Barron

General Mills Arbitration Ploy Could Backfire

Arbitration clauses hidden in the small print of many contracts take away consumers' right to sue in court, the right to a jury trial, the right to discovery of internal corporate documents, the right to class actions, the right to appeal, and other aspects of civil justice Americans take for granted.

Because binding arbitration can insulate corporations from liability for fraud, product defects, false advertising, even contaminated food and dangerous drugs, arbitration clauses have become more and more common in form contracts drafted by company lawyers. Exculpatory in nature, they eviscerate long-standing consumer protection laws.

Courts have held that consumers do not have to actually know what rights they are giving up, in order for hidden arbitration clauses to be enforceable. This is shocking. The absurdity of the fiction that purchasers have agreed to give up important consumer rights just by using a product, has given rise to a long-standing joke among advocates: namely, that a future arbitration clause could be hidden like a plastic prize at the bottom of a Cheerios box.

That's no longer a joke. The future is here.

The food conglomerate General Mills recently posted a notice on its website that consumers give up their right to sue the company if they download coupons, like it on social media such as Facebook, or received any benefit from the company that can be accessed using the website. Since the website advertises the company's vast list of products, General Mills might argue that just buying its products would bind consumers to waive his or her rights and accept arbitration. The action brought an avalanche of unwelcome publicity, including articles in business journals, online new magazines and the New York Times.

A partial list of brands covered by the clause includes: Pillsbury, Betty Crocker, Hamburger Helper, Nature Valley, Wheaties, Chex, Bisquick, Cheerios, Total, Yoplait, even the organic favorite, Cascadian Farms. And, of course, Lucky Charms.

The cereal maker apparently doesn't know its own folklore. Legend holds that if a human catches a leprechaun, the mischievous little thief must grant its captor three wishes. The first wish any consumer of Lucky Charms should be simply: "I wish General Mills would give me back my rights."