General Mills Reverses Position On Right To Sue
Late last week, I wrote about a change of policy by General Mills that seemed to say that consumers who interact with the company online would abandon their right to sue the company in court and would instead be forced to send their disputes to arbitration. After pretty much universally negative reactions, the company has announced that it is reversing course and will not be adopting the new policy:
General Mills, one of the country’s largest food companies, on Saturday night announced in a stunning about-face that it was withdrawing its controversial plans to make consumers give up their right to sue it.
In an email sent after 10 p.m. on Saturday, the company said that due to concerns that its plans to require consumers to agree to informal negotiation or arbitration had raised among the public, it was taking down the new terms it had posted on its website.
“Because our terms and intentions were widely misunderstood, causing concerns among our consumers, we’ve decided to change them back to what they were,” Mike Siemienas, a company spokesman, wrote in the email. “As a result, the recently updated legal terms are being removed from our websites, and we are announcing today that we have reverted back to our prior legal terms, which contain no mention of arbitration.”
The announcement was a stunning reversal for the company, which had quietly put up the new terms requiring consumers downloading coupons, “joining its online communities,” participating in sweepstakes and other promotions, and interacting with General Mills in a variety of other ways to agree to arbitration in lieu of suing the company in the event of a dispute.
It doesn’t strike me as very stunning at all. General Mills quietly announced a policy change which ended up becoming a New York Times story that was widely circulated online and via social media, resulting in an overwhelmingly negative reaction from consumers. Given the fact that it was unlikely that the policy would be upheld in Court anyway, the damage to brand reputation that could have resulted if they had gone forward with the policy. In the long run, preserving the reputations of its brands is far more valuable to the corporation than whatever minimal benefited might have resulted from this policy change.