Sunday, April 20, 2014

General Mills: We've Listened

Yesterday, General Mills posted an announcement on their website by Kirstie Foster, titled, We’ve Listened – and We’re Changing Our Legal Terms Back.  

Bill Marler blogged about it on Food Safety News with his Publisher’s Platform article, I’m having Cheerios for Breakfast; General Mills Decides to Focus on Food Safety Instead of Litigation.

General Mills had initially announced new legal terms that attempted to force consumers with any type of complaint into commercial arbitration. Consumers would have legally agreed to this limitation on their basic rights to go to court simply by accepting an online coupon from the General Mills website.

The new policy was first reported in the New York Times article, When ‘Liking’ a Brand Online Voids the Right to Sue by Stephanie Strom.  It was picked up by several other media outlets, Bill Marler blogged about it on Food Safety News, General Mills: You Can't Sue Me!, and we posted about it on Agricultural Law,  General Mills: Brilliant Legal Maneuver of the Worst Public Relations Move Ever.

The new policy was short lived.  The consumer backlash and the negative publicity made General Mills reconsider the wisdom of this approach, and as noted by Ms Foster, they rescinded the policy. Saving face, they referred to those who "misread" the policy and misunderstood their attempts to "streamline" the process of resolving complaints.  That said, it was pretty clearly a policy intended to limit the rights of consumers to sue General Mills in court, forcing them into the much more restrictive and industry-friendly commercial arbitration.

I am not a fan of frivolous lawsuits, and I personally think that judges should be more active in dismissing them. But, there is a lot of room to debate frivolity. With an FDA that is overburdened and underfunded, there is often no one "minding the store" on labeling issues. Without the threat of court action, there would be even less incentive for manufacturers to be upfront with their use of claims and promises.

For example, the FDA has consistently refused to define the term "natural" even though it is one that consumers often have relied on in making their purchasing decisions. And, sometimes, those consumers have been shocked to find out what ingredients were used in products labeled as "natural."

Moreover, on its face, the mandatory arbitration clause applied to all manner of claims, "contract, tort, statute, fraud, misrepresentation, or any other legal theory." This would have forced serious food borne illness and even wrongful death claims out of court and into binding arbitration.

As a law professor, I usually view things from the perspective of how we can teach our students to be better lawyers. It seems that this incident may be a great example to use in the classroom.

Being a smart lawyer can be different than being a good lawyer.  It appears that the smart lawyers representing General Mills could have stepped back from their legal analysis to do some practical analysis.  How are our customers going to react to this?  What does this action do to the trust that we have worked so hard to build up? Do we accomplish our legal goal at the expense of our public image? And, finally, is it right to trick our customers into agreeing to something that they do not understand? As Bill Marler noted, they would be better served to put their efforts into making good, honest, healthy and safe products.

Congratulations to General Mills for having the wisdom to call this policy back before any more damage was done to its reputation.  I'll have a bowl of Cheerios as well.


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