Remember all the good buzz that General Mills got for those awesome Cheerios commercials featuring the interracial family? That may soon all be forgotten with the release of news that the company is quietly inserting forced arbitration provisions in a number of interactions with its customers. Take a look at the link, but very briefly, General Mills is inserting language on its Web site to the effect that by downloading coupons, “joining” the company on online communities like Facebook, or entering a company-sponsored sweepstakes or contest forfeit their right to sue the company, and instead, “agree” to arbitrate any disputes.
I put the agree in quotation marks, because the average consumer is unlikely to see the term. It resides in the Legal Terms section of the Web site. And it is pretty one sided. The terms stipulate that “all disputes or claims arising out of this Agreement or your purchase or use of any General Mills product or service for personal or household use” must be arbitrated or resolved in a small claims court. So no jury trials or class actions allowed. The arbitration is required to be confidential, which means no disclosing the “existence” or “result” of the arbitration.
And you may ask why is General Mills taking this heavy handed approach? Probably because it can. The U.S. Supreme Court decided a case a few years back that said companies could enforce contractual provisions that required its customers to waive their rights to proceed in a class action. That case – in which AT&T enforced a term in its contract with a mobile phone customer — arose in a more traditional contract setting. We’ll see if General Mills’ efforts to expand that case into the social media realm succeeds.
The question will likely come down to how effectively General Mills conveyed its new terms. If consumers are able to show that they reasonably missed this change, it’s unlikely a court would uphold the provision. On the other hand, if General Mills can show that it alerted consumers to the new terms, courts may very well enforce them.
Of course, that analysis doesn’t take into account the customer relations issue. But I suppose General Mills decided the legal savings will make up for any public relations hit it takes. I’m curious if my readers agree. Let me know.
And many thanks to my friend Nick Vehr for the heads up on this one.