The Minnesota Supreme Court affirmed a lower court ruling that provides employers with absolute immunity from civil liability for information submitted during unemployment benefits proceedings, resolving a closely watched case that clarifies the scope of employer protections under state law.
In *Thaleaha McBee v. Team Industries, Inc.*, the court interpreted Minnesota Statutes section 268.19, subdivision 2(c), which grants "absolutely privileged" status to information submitted to the Department of Employment and Economic Development (DEED) for unemployment benefits determinations. The decision, filed October 29, 2025, establishes that this immunity applies when such information forms the subject matter or basis of a civil lawsuit.
The case arose after McBee was terminated from her position at Team Industries following her report to company staff that she was experiencing back problems. McBee subsequently filed suit under the Minnesota Human Rights Act, alleging that Team failed to provide reasonable accommodations and engaged in disability discrimination.
Before trial, Team moved to exclude from evidence a questionnaire it had completed and submitted to DEED regarding McBee's unemployment benefits eligibility. The district court granted the motion, ruling that the questionnaire was protected by absolute privilege under the unemployment statute.
The Minnesota Supreme Court's opinion, authored by Justice McKeig, focused on the interpretation of the phrase "absolutely privileged" within the unemployment benefits context. The court held that this language provides immunity from liability in civil actions where information submitted to DEED forms the foundation of the legal claim.
"As used in Minnesota Statutes section 268.19, subdivision 2(c), the phrase 'absolutely privileged' provides immunity from liability in civil actions for which information submitted to the Department of Employment and Economic Development, in order to determine an applicant's entitlement to unemployment benefits, forms the subject matter or basis of the claim," the court wrote in its syllabus.
The ruling addresses a significant question in employment law regarding the balance between protecting the integrity of the unemployment benefits system and preserving employees' rights to pursue civil remedies for workplace violations. By interpreting the statute to provide broad immunity, the court emphasized the importance of encouraging honest and complete information sharing in unemployment proceedings.
The decision has implications for both employers and employees throughout Minnesota. Employers now have clearer guidance that information they provide to DEED during unemployment benefits proceedings cannot be used against them in subsequent civil litigation, potentially encouraging more candid responses to agency inquiries.
For employees pursuing discrimination or other employment-related claims, the ruling limits the documentary evidence available in civil proceedings. Plaintiffs' attorneys must now develop alternative strategies for proving their cases without relying on employer statements made during unemployment benefits determinations.
The case drew significant attention from employment law practitioners, with multiple amicus briefs filed by organizations representing both employees and employers. The Minnesota Chapter of the National Employment Lawyers Association and the Employee Lawyers Association of the Upper Midwest submitted briefs supporting McBee's position, while employer groups likely supported Team Industries' interpretation of the statute.
Justice Hennesy took no part in the decision, reducing the court to six participating justices who unanimously affirmed the lower court's ruling. This consensus suggests broad agreement on the court about the proper interpretation of the absolute privilege provision.
The ruling builds on existing Minnesota precedent regarding qualified and absolute privileges in various legal contexts. Absolute privilege, as distinguished from qualified privilege, provides complete immunity from liability regardless of the speaker's intent or motivation, reflecting the legislature's determination that certain communications warrant maximum protection.
Legal experts note that the decision aligns Minnesota with other jurisdictions that have adopted similar protections for unemployment benefits proceedings. The ruling reflects a policy judgment that the unemployment benefits system functions more effectively when employers can provide information without fear of civil liability.
The immediate impact for Team Industries is that it successfully prevented McBee from using the DEED questionnaire as evidence in her discrimination lawsuit. However, the case will likely continue on other grounds, as the ruling addresses only the admissibility of the specific unemployment-related documents.
Looking forward, the decision provides clear guidance for trial courts handling similar evidentiary questions. Employment attorneys on both sides now have definitive guidance on what information from unemployment proceedings can and cannot be used in civil litigation.
The ruling also may influence how employers approach unemployment benefits proceedings, potentially leading to more detailed and candid responses to DEED inquiries now that absolute privilege protection is clearly established. This could ultimately benefit the unemployment benefits system by improving the quality of information available to agency decision-makers.
For McBee, the ruling represents a setback in her discrimination case against Team Industries, though it does not preclude her from pursuing her claims using other evidence. The case continues to proceed through the court system on the underlying discrimination allegations.