Finally, we can strike one off our list. We can remove big corporate food manufacturer General Mills from Public Citizen’s Forced Arbitration Rogues Gallery, an unofficial catalogue of some of the many corporations that use their fine-print contracts to deprive consumers of the right to sue, forcing them instead to resolve disputes in individual, secret arbitration.
Removing General Mills from the “Rogues Gallery” is the least we can do now that the cereal and snack maker has itself deleted the hideous “you can’t sue us for harm we cause” language from the legal terms of its website.
General Mills recently had added a forced arbitration clause to its “legal terms” on its website and prohibited class actions in its terms of service for the same reasons as most other corporations – to unilaterally deprive its customers from filing lawsuits against it and escape responsibility for causing injury. The reason behind General Mills’ move to reverse its ill-fated decision is awe-inspiring: it’s the people!
Lesson Number One for corporate lawyers and public relations spokespersons – American consumers would like to retain their legal rights, thank you very much.
After an article in The New York Times exposed General Mills offensive terms, the people reacted, and quickly.
@Wonkette (Apr 17): “You Can No Longer Sue General Mills Even If They Serve You A Big Bowl Of E Coli http://bit.ly/1iud62l”
Three days after The New York Times piece was published, General Mills recanted.
While it added a few unfortunate face-saving comments about “mischaracterizations” and the public’s misunderstanding of the new terms that were appropriately blasted by The Consumerist, the expression of regret was appreciated: “We stipulate for all purposes that our recent Legal Terms have been terminated, that the arbitration provisions are void, and that they are not, and never have been, of any legal effect,” the company representatives posted on its blog. “On behalf of our company and our brands, we would also like to apologize. We’re sorry we even started down this path. And we do hope you’ll accept our apology.”
This is a scenario we’ve seen before. Arbitration clauses and class action bans are increasingly prevalent in corporate contracts and are imposed on consumers’ rights on a daily basis, but when the people have a chance to protest, the company is forced to reverse its policies after public exposure.
As recently as last December, the Grey Lady again – this time in its automobile section – uncovered and examined the details of an arbitration clause in Hyundai’s owner manuals directing that consumers’ warranty disputes with the auto manufacturer be resolved in arbitration instead of court. Just hours after the original article was posted, Hyundai announced that it would cancel its arbitration clause.
Similarly, last year brokerage firm Charles Schwab was caught overstepping the bounds. The investor firm, which had long included an arbitration clause in its contracts with customers, decided that it would go even further by prohibiting its customers from participating in class actions against it.
The uproar included a Public Citizen petition, Congressional reaction, and organizational calls for action to the federal oversight agency the Securities and Exchange Commission, demanding that the agency ban arbitration clauses in brokerage firm and investment advisor contracts with their customers. Significant news media coverage followed. Soon after, Charles Schwab relented. While it did not remove the arbitration clause from its customers’ contracts, it eliminated the class action ban, at least for now.
Forced arbitration, a nefarious scheme to deny the people their right to sue when harmed, is spreading like a poison through industries that provide products and services to consumers, and in corporate employers’ contracts with employees. General Mills sought to jump on the bandwagon, but it was exposed and the public was not amused.
There are so many other corporations who have taken away our right to sue. We can pursue each one individually, or we can fight to get our rights back by demanding an outright ban on these clauses in consumer contracts like here and here and here.
Power to the people.
Christine Hines is the consumer and civil justice counsel for Public Citizen’s Congress Watch division.