Like a Page on Facebook, Waive Your Right to Sue?

Consumer protection, News, Technology

General Mills faced a PR disaster after a report in The New York Times stated that people who “like” any of the company’s brands on Facebook automatically give up their rights to sue the company. The Times has since corrected itself, saying that consumers in fact waive their right to sue the company if they download coupons or join one of the company’s “online communities,” which a rep for General Mills says doesn’t include Facebook. Those who join one of the online communities are required to use informal negotiation via email or go through arbitration — rather than the courts — to seek relief if they have a dispute with the company.

What Do You Give Up When You Click?

General Mills is probably the first food company to require consumers to enter into such a legal agreement; however, companies have been getting sneakier about getting consumers to enter into such agreements. Credit card and mobile phone companies’ contract language contains such agreements.

This means that what’s off the table is a class-action lawsuit — the kind that gets millions of dollars for the lawyers, and maybe a five-dollar check for each consumer after the lawyers take out their cut and fees.

These class-action waivers in arbitration clauses protect corporations from having to offer huge damages in court. Since a lot of consumer fraud claims might only be worth a buck or two, they won’t be taken by a lawyer without being class-action and therefore worth a substantial amount of money.

Are Consumers Safe?

In 1925, Congress passed the Federal Arbitration Act, requiring judges to honor most arbitration agreements in contracts. Any adequately-disclosed clickwrap agreement could therefore include personal injury claims, including the hypothetical claim cited by the New York Times: if a General Mills employee put a shard of glass into your Cheerios and you ate it, you still might not be able to sue in front of a jury.

Bottom line?  For now, well, maybe don’t buy General Mills products — or at least look into any company’s online policies before buying their products. Also, according to Forbes, anybody wishing to preserve his or her right of jury trial can opt out of the policy entirely by notifying General Mills in writing.