General Mills has quietly added fine print alerting consumers that they give up their right to sue the food manufacturer when they download coupons, interact with the company on social media, or enter company-sponsored sweepstakes, the New York Times reported.
These new terms now require consumers who receive anything that could be perceived as a benefit from the company to go through arbitration instead of filing a lawsuit, the paper reported.
In fact, the Times reported, the company made additional changes Tuesday, after a reporter contacted General Mills, suggesting that even a purchase of their products – which include Betty Crocker, Bisquick, and Fiber One – would bind customers to the new terms.
The change in legal terms came shortly after a judge refused to dismiss a suit against the company by two mothers in California who claimed the company deceptively marked its Nature Valley products as “natural,” despite their processed and genetically engineered ingredients.
“The front of the Nature Valley products’ packaging prominently displays the term ‘100% Natural’ that could lead a reasonable consumer to believe the products contain only natural ingredients,” the district judge, William H. Orrick, said in his decision.
It’s possibly the first, but likely not the last, major company to impose “forced arbitration” on its customers.
“Although this is the first case I’ve seen of a food company moving in this direction, others will follow — why wouldn’t you?” said Julia Duncan, an arbitration expert for a trade group that represents plaintiff trial lawyers. “It’s essentially trying to protect the company from all accountability, even when it lies, or say, an employee deliberately adds broken glass to a product.”
The company declined to make a representative available to the Times, but it issued a statement calling arbitration a rarely used but efficient way to resolve disputes.
“We even cover the cost of arbitration in most cases,” General Mills said in the statement. “So this is just a policy update, and we’ve tried to communicate it in a clear and visible way.”
The 2011 U.S. Supreme Court decision in the AT&T Mobility v. Concepcion allowed companies to prevent customers from filing class-action lawsuits by using standard-form contracts requiring informal, one-on-one arbitration.
Credit card companies and mobile phone companies typically impose such limitations on their customers, and Mother Jones reported in 2008 that a Whataburger fast food restaurant warned customers on a sign hung outside that they gave up their right to sue simply by entering the eatery.
Legal experts say the General Mills fine print could protect the manufacturer from lawsuits over food recalls for mislabeling – such as a failure to warn those with allergies of the presence of nuts in products.
“When you’re talking about food, you’re also talking about things that can kill people,” said Scott L. Nelson, a lawyer at the nonprofit Public Citizen advocacy group. “There is a huge difference in the stakes, between the benefit you’re getting from this supposed contract you’re entering into by, say, using the company’s website to download a coupon, and the rights they’re saying you’re giving up. That makes this agreement a lot broader than others out there.”
General Mills paid $8.5 million last year to settle lawsuits over positive health claims made on package of Yoplait Yoplus yogurt and agreed in a 2012 settlement to remove the word “strawberry” from its Strawberry Fruit Roll-Ups, which did not actually contain strawberries.
Legal experts say the General Mills policy is so broadly written that it could likely be challenged in court, and the company’s lawyers would likely be required to prove a customer was aware of the new policy before denying legal action against the manufacturer.
“You can bet there will be some subpoenas for computer hard drives in the future,” Nelson said.
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