In an April 16 New York Times article, Stephanie Strom reported that ” General Mills, the maker of cereals like Cheerios and Chex as well as brands like Bisquick and Betty Crocker, has quietly added language to its website to alert consumers that they give up their right to sue the company if they download coupons, “join” it in online communities like Facebook, enter a company-sponsored sweepstakes or contest or interact with it in a variety of other ways.”

On April 17, the company “walked-back” this quiet language through a legal amendment to its policy saying that “No one is precluded from suing us merely by purchasing our products at the store or liking one of our brand Facebook pages.” However, several legal scholars say that the policy is still so exceptionally broad that it may be possible for anything you purchase from them to be subject to arbitration rather than through legal suits.

Finally on April 20, the New York Times reported that after a considerable uproar and much public attention, General Mills retracted the whole arbitration clause saying its terms and intentions were misunderstood.

Questions:
1. Do you think that the April 16 policy was a move to take away consumer rights?
2. According to Greg Webb, what event did the new policy coincide with?
3. Why would a large company prefer arbitration to legal suits before a court of law?
4. In 2013, General Mills paid $8.3 million for lawsuits stemming from health benefit claims on packaging of Yoplait Yoplus yogurt. How should this be recorded in the financial statement of
General Mills? Would a journal entry be necessary? Explain your reasoning.

Sources:
Strom, S. (2014). When ‘Liking’ a Brand Online Voids the Right to Sue. The New York Times, April 16 (Retrievable online at http://www.nytimes.com/2014/04/17/business/when-liking-a-brand-online-voids-the-right-to-sue.html?action=click&contentCollection=Business%20Day&module=RelatedCoverage&region=Marginalia&pgtype=article

Strom, S. (2014). General Mills Amends New Legal Policies. The New York Times, April 17 (Retrievable online at http://www.nytimes.com/2014/04/18/business/general-mills-amends-new-legal-policies.html?action=click&contentCollection=Business%20Day&module=RelatedCoverage&region=Marginalia&pgtype=article)

Strom, S. (2014). General Mills Reverses Itself on Consumers’ Right to Sue. The New York Times, April 20 (Retrievable online at http://www.nytimes.com/2014/04/20/business/general-mills-reverses-itself-on-consumers-right-to-sue.html?action=click&module=Search&region=searchResults&mabReward=relbias%3As%2C%5B%22RI%3A1%22%2C%22RI%3A3%22%5D&url=http%3A%2F%2Fquery.nytimes.com%2Fsearch%2Fsitesearch%2F%3Faction%3Dclick%26contentCollection%3DBusiness%2520Day%26region%3DTopBar%26WT.nav%3DsearchWidget%26module%3DSearchSubmit%26pgtype%3Darticle%23%2FApril+20+General+Mills)

Webb, G. (2014). Disturbing Trend: Attempted Attack on Jury Trial System By General Mills is Exhibit A. The Legal Examiner, May 5 (Retrievable online at http://charlottesville.legalexaminer.com/miscellaneous/disturbing-trend-attempted-attack-on-jury-trial-system-by-general-mills-is-exhibit-a/)