Is That Cheerio’s Coupon Worth Your Legal Rights?

Do you like your morning bowl of Cheerio’s enough to waive your legal rights?

General Mills came under fire on social media this week over changes to its legal terms which say consumers who download coupons online and participate in online brand forums cannot file class action lawsuits against the company, and instead must resolve legal issues through “forced arbitration.”

The New York Times was first to report that the maker of products such as Lucky Charms, Old El Paso and Häagen-Dazs “quietly” added language to its website letting consumers know that if they download coupons or enter company-sponsored sweepstakes they waive their rights to sue. The Times says General Mills is one of the first major food brands to make this change, after a judge in California refused to dismiss a case against the company brought by consumers.

General Mills (NYSE:GIS)  is pushing back, calling the Times story a “broad mischaracterization.”

In an email to FOXBusiness.com, General Mills spokesperson Mike Siemienas wrote: “No one is precluded from suing us merely by purchasing our products at the store or liking one of our brand Facebook pages. That is just a mischaracterization. For example, should an individual subscribe to one of our publications or download coupons, these terms would apply.  But even then, the policy would not and does not preclude a consumer from pursuing a claim.  It merely determines a forum for pursuing a claim.  And arbitration is a straightforward and efficient way to resolve such disputes.”

Domenic Romano, New York City attorney and founder at Romano Law PLCC, says the move gives consumers “uneven bargaining power.”

“Companies will argue this is about costs and litigation, and to prevent people from suing over everything,” Romano says. “This means when you are downloading a coupon, getting involved in any contests, subscribing to publications, you are waiving your rights. If you get into a disagreement with the company, it can only be resolved through binding arbitration or negotiations.”

And he says this is done behind closed doors, to protect the brand.

“Consumer advocacy groups say that if you take away a consumers’ rights to court, private resolutions are largely controlled by companies,” Romano says. “The public won’t know what’s going on, so [companies] are keeping it in the dark.”

Consumers should be aware of legal terms when downloading these coupons or participating in forums online, Romano warns. The move may even cost General Mills a few customers.

“Be aware of what you are consenting to,” he says. “You may want to think twice about engaging with brands that have unreasonable terms.”