April 17, 2014

Top-secret cereal arbitration

General Mills recently revised the terms posted on its website, adding a provision that requires disputes between consumers and the company to be brought in binding arbitration. The interesting part is this: The arbitration provision says it applies to "all disputes or claims arising out of this Agreement or your purchase or use of any General Mills product or service for personal or household use." In other words, if you want to sue General Mills because there weren't enough marshmallows in your Lucky Charms, you have to bring the claim in arbitration rather than in court (assuming that the amount of your claim exceeds the small claims court maximum -- and if you're really going to sue over something like this, you might as well aim high).

The New York Times is understandably troubled by this -- see When 'Liking' a Brand Online Voids the Right to Sue -- but the requirement to arbitrate doesn't bother me nearly as much as the confidentiality provision:
Any arbitration will be confidential, and neither you nor General Mills may disclose the existence, content, or results of any arbitration, except as may be required by law or for purposes of enforcement of the arbitration award.
That strikes me as overreaching and contrary to public policy.  It's common for companies to agree that they will keep arbitration proceedings confidential (in many cases, including financial service providers, they're probably required to do so anyway), but prohibiting a consumer from disclosing information about the dispute is a very bad idea, and one that seems likely to backfire.

Update (4/21/14): General Mills has retracted the policy.