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In an Attempt to Avoid Lawsuits, General Mills Pushes for Forced Arbitration

April 30, 2014

The right to a trial by jury in civil matters is firmly entrenched in the United States Constitution. The civil justice system is the only tried and tested check on corporate malfeasance, and it is only in the courtroom where individual citizens can bring massive corporations to justice. Often, two adverse parties can agree to resolve civil claims in a private forum, like arbitration or mediation. This alternative to the courts is sometimes in the best interest of both litigants–it expedites the process and is usually more cost effective. Arbitration or mediation that is mutually agreed-upon is fully acceptable, but forced arbitration is what lawyers refer to as a contract of adhesion and should be deplored. This now-prevalent tactic of mandating arbitration from consumers is nothing less than a frontal assault on the civil justice system.

Earlier this month, Kevin Spak of the journalism website Newser broke a story whose title is telling, “You’re Apparently Not Allowed to Sue General Mills.” Though the language of this headline is a bit sensational, it is not at all inaccurate, and Spak goes on to explain that the food company (maker of Cheerios, Chex and products Betty Crocker, Pillsbury, and Green Giant) decided to change its legal terms dramatically. General Mills claimed that by interacting with its brands online–downloading coupons, “liking” them on Facebook, and entering manufacturer-sponsored contests–consumers were giving up their right to sue the company. This business practice, which is common among large corporations throughout the world, is known as forced or mandatory arbitration.

This unethical and unfair practice is far more widespread than most people realize: nearly all contracts involving mobile phone companies, gym memberships, and credit cards include such language. Consumers have, in many cases without even being aware of it, signed away their rights to sue companies whose services they use on a day-to-day basis. In the case of General Mills, the company posted a message on its website alerting visitors, “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.”

A source in the 2011 documentary Hot Coffee claims that more than a third of the working people in America are bound to be subject to forced arbitration clauses, a larger number than are in labor unions. And in nearly every case, the corporation gets to choose the arbitrator, adding a serious level of bias into the arrangement because, obviously, the arbitrator wants to keep getting business.

A New York Times article on the General Mills case quotes an arbitration expert at the American Association for Justice, who says that this is the first in what promises to be a long line of food companies embracing forced arbitration. “Why wouldn’t you?” she asks, “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.” As the Times points out, the issue could be much less intentional but equally tragic, like a peanut-allergic child eating a product that contains trace amounts of peanuts despite claims not to. If General Mills had its way, the family of this child would be unable to sue the company.

General Mills, amid controversy from consumer advocates across the internet, chose to reverse its position on this issue a day after the announcement, but a spokesperson for the company insists that forced arbitration is “an efficient way to resolve disputes.”

Both Newser and the New York Times mention the 2011 Supreme Court decision AT&T Mobility v. Concepcion, which enabled businesses avoid class action lawsuits in cases involving fraud. This forces individuals to take their complaints to companies one-by-one, thus preventing those wronged from standing together against corporate wrongdoing. Consumers need to recognize that they are unwittingly giving up their right to a jury trial when they patronize corporations with strings attached to every purchase. When possible, they should always refuse mandatory mediation in writing. Though individual citizens are the underdog, all it takes is a few small victories to get big corporations to retreat from this unfair practice.

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