“Absolutely Privileged” in Minn. Stat. § 268.19, subd. 2(c) Is Immunity from Liability, Not an Evidentiary Bar

Commentary on Thaleaha McBee v. Team Industries, Inc., Minnesota Supreme Court (Oct. 29, 2025)

Introduction

In Thaleaha McBee v. Team Industries, Inc., the Minnesota Supreme Court resolved an important interpretive question about the scope and meaning of “absolute privilege” in the state’s unemployment insurance confidentiality statute, Minn. Stat. § 268.19, subd. 2(c). The case arose from a disability discrimination and failure-to-accommodate action under the Minnesota Human Rights Act (MHRA), Minn. Stat. §§ 363A.01–.50, following the termination of Ms. McBee after she reported serious back problems and a physician-imposed 10-pound lifting restriction.

Central to the appeal was a Department of Employment and Economic Development (DEED) Unemployment Insurance Request for Information (the “DEED Questionnaire”), in which Team acknowledged that it did not attempt to accommodate McBee’s condition. The district court excluded the questionnaire based on § 268.19, subd. 2(c). The court of appeals affirmed on the theory that information submitted to DEED for unemployment benefits is “absolutely privileged” and therefore inadmissible in other proceedings. The Supreme Court granted review to decide whether § 268.19 renders such DEED-submitted information inadmissible.

The Supreme Court’s answer is nuanced and precedential: the phrase “absolutely privileged” in § 268.19, subd. 2(c) confers immunity from civil liability for claims based on the content of the information provided to DEED; it does not create an evidentiary rule of inadmissibility. Although the Court held the district court erred by excluding the DEED Questionnaire, it ultimately affirmed because the error was harmless—other trial evidence already established the same facts.

Summary of the Opinion

• Statutory holding: “Absolutely privileged” in Minn. Stat. § 268.19, subd. 2(c) is a term of art meaning immunity from civil liability, not an evidentiary privilege or categorical bar to admissibility. The immunity applies where the DEED-submitted information is “the subject matter or the basis for” a civil claim.
• Scope: The immunity is not confined to defamation claims; by its terms it extends to “any civil proceeding, administrative, or judicial,” when the claim’s subject matter or basis is the DEED-submitted information.
• Application: The DEED Questionnaire was not itself the subject matter or basis of McBee’s MHRA claim (which was based on workplace conduct, not the DEED communication). Therefore, § 268.19 did not bar its admissibility.
• Disposition: Excluding the questionnaire was error but harmless. The bench trial record already contained testimony establishing the same facts (that Team did not attempt accommodations and feared a workers’ compensation claim). The court affirmed the court of appeals on different grounds.

Analysis

I. Statutory Text and Framework

Minnesota’s unemployment insurance statutes seek to “provid[e] workers who are unemployed through no fault of their own a temporary partial wage replacement.” Minn. Stat. § 268.03. Section 268.19 governs disclosure and use of information gathered under that program. Subdivision 2(a) authorizes employers to provide DEED with information “so that the commissioner can determine an applicant’s entitlement to unemployment benefits.” Subdivision 2(c) states:

“Information obtained under the Minnesota Unemployment Insurance Law, in order to determine an applicant’s entitlement to unemployment benefits, are absolutely privileged and may not be made the subject matter or the basis for any civil proceeding, administrative, or judicial.”

The controversy centered on whether “absolutely privileged” means the information is categorically inadmissible evidence or whether it signifies immunity from civil liability for claims predicated on that information. The Supreme Court adopted the latter.

II. Precedents and Authorities Cited

The Court employed dictionary definitions, longstanding Minnesota case law, statutory structure, and interpretive canons:

• Legal dictionaries: Black’s Law Dictionary (12th ed. 2024) defines absolute privilege as a protection that “immunizes an actor from suit.” Ballentine’s Law Dictionary and Merriam-Webster’s Dictionary of Law similarly frame absolute privilege as immunity from liability, often (though not exclusively) in defamation contexts.
• Minnesota case law on absolute privilege:
  • Sherwood v. Powell, 63 N.W. 1103 (Minn. 1895) and Matthis v. Kennedy, 67 N.W.2d 413 (Minn. 1954): absolute privilege shields participants in judicial proceedings from defamation suits.
  • Johnson v. Dirkswager, 315 N.W.2d 215 (Minn. 1982); Carradine v. State, 511 N.W.2d 733 (Minn. 1994): high-level official communications and police reports enjoy absolute privilege against defamation claims.
  • Zutz v. Nelson, 788 N.W.2d 58 (Minn. 2010); Harlow v. State Dep’t of Human Services, 883 N.W.2d 561 (Minn. 2016): surveys the doctrine and its purposes across contexts.
  • Mahoney & Hagberg v. Newgard, 729 N.W.2d 302 (Minn. 2007): absolute privilege cannot be evaded by relabeling defamation as other torts when the claims “sound in defamation.”
• Statutory interpretation principles:
  • Poehler v. Cincinnati Ins. Co., 899 N.W.2d 135 (Minn. 2017); Walsh v. State, 975 N.W.2d 118 (Minn. 2022): de novo interpretation; give effect to plain meaning.
  • Minn. Stat. § 645.08(1): terms with “acquired special meaning” must be construed accordingly.
  • Hagen v. Steven Scott Mgmt., Inc., 963 N.W.2d 164 (Minn. 2021); State v. Pakhnyuk, 926 N.W.2d 914 (Minn. 2019); State v. Riggs, 865 N.W.2d 679 (Minn. 2015): text, structure, punctuation, and canons of interpretation.
  • State v. Townsend, 941 N.W.2d 108 (Minn. 2020); Bd. of Regents v. Royal Ins. Co. of Am., 517 N.W.2d 888 (Minn. 1994): read phrases in context.
  • In re Commitment of Benson, 12 N.W.3d 711 (Minn. 2024): canon against surplusage; give effect to all words.
• Error and prejudice standards:
  • Minn. R. Civ. P. 61 (harmless error); Kallio v. Ford Motor Co., 407 N.W.2d 92 (Minn. 1987) (prejudicial-error standard); Becker v. Mayo Found., 737 N.W.2d 200 (Minn. 2007) and Poppenhagen v. Sornsin Constr. Co., 220 N.W.2d 281 (Minn. 1974) (“might reasonably have changed the result” test); Hornof v. Klee, 106 N.W.2d 448 (Minn. 1960) (exclusion of cumulative evidence not prejudicial); Midway Ctr. Assocs. v. Midway Ctr., Inc., 237 N.W.2d 76 (Minn. 1975) (burden to show error).
• Other statutes: Minn. Stat. § 609.765, subd. 3(1) (criminal defamation justified if “absolutely privileged”); examples of statutes that expressly create evidentiary bars (e.g., Minn. Stat. § 169.09, subd. 13(b) (accident reports “not discoverable” and “must not be used as evidence”)) and evidentiary privileges (Minn. Stat. § 595.02).

These authorities collectively support that “absolute privilege” is a term of art denoting immunity from liability, not an evidentiary exclusion, and that when the Legislature intends to regulate admissibility, it does so explicitly.

III. The Court’s Legal Reasoning

The Court applied plain-meaning textualism, emphasizing both the acquired legal meaning of “absolute privilege” and the immediate statutory context.

• Term of art: “Absolute privilege” has an “acquired special meaning” in law—immunity from suit—even if the underlying statements are false or malicious. Courts must give effect to that specialized meaning under Minn. Stat. § 645.08(1).
• Contextual reading: Subd. 2(c) does not stop at labeling information “absolutely privileged.” It adds a limiting operative clause: such information “may not be made the subject matter or the basis for any civil proceeding.” This phrase aligns with tort immunity (shielding from claims predicated on the content of the communication), not with a global rule of inadmissibility.
• Canons of interpretation:
  • Against surplusage: Reading “absolutely privileged” to mean “inadmissible” would render superfluous the clause “may not be made the subject matter or the basis for any civil proceeding.”
  • Whole-statute canon: Subd. 2(c) must be harmonized with subd. 2(a) (encouraging employer submissions to DEED) and with the Legislature’s pattern elsewhere of expressly stating when information is “not discoverable” or “must not be used as evidence.”
• Beyond defamation: The clause reaches “any civil proceeding,” confirming the Legislature did not confine the immunity to defamation. It covers any claim in which the DEED-submitted communication is itself the actionable wrong (e.g., defamation and defamation-adjacent claims), while leaving other claims (such as MHRA claims based on workplace conduct) unaffected.

IV. Application to the Case

McBee’s MHRA claim alleged failure to accommodate and disability discrimination based on Team’s workplace actions culminating in termination. The DEED Questionnaire—where Team checked “No” to accommodating McBee’s restrictions and explained its workers’ compensation concerns—was relevant to whether Team attempted accommodations.

But the claim did not arise from the act of communicating with DEED, nor was it a claim “about” or “based on” the content of the DEED submission. Therefore:

• § 268.19, subd. 2(c) did not bar the questionnaire’s admission;
• the district court erred by excluding it on that statutory ground; however
• the error was harmless because the same facts were proven by other evidence at the bench trial, including manager testimony that Team did not attempt accommodations after learning of the 10-pound restriction and that liability concerns motivated the decision.

The Court did not need to reach Team’s alternative Rule 403 argument, and the court of appeals had not reached the separate question under Minn. Stat. § 268.105, subd. 5(b) (which concerns use of hearing testimony during DEED appeals). The Supreme Court’s review was limited to § 268.19; on that ground, it found error but no prejudice.

V. Impact and Practical Consequences

The decision realigns the lower courts’ approach to unemployment insurance materials and clarifies litigation strategy for both employers and employees:

• Evidentiary use of DEED submissions:
  • Parties may discover and potentially admit employer-submitted DEED information in non-DEED civil litigation (e.g., MHRA, whistleblower, or contract cases), provided other evidentiary rules are satisfied.
  • Section 268.19, subd. 2(c) cannot be invoked as a blanket bar to admissibility.
• Scope of immunity:
  • Employers are immune from civil liability for claims whose subject matter or basis is the information given to DEED (e.g., defamation, injurious falsehood, or parallel torts “sounding in defamation,” see Mahoney & Hagberg).
  • The immunity is not limited to defamation and extends across civil proceedings, administrative and judicial.
• Litigation posture:
  • Employees can use employer admissions to DEED as substantive evidence or for impeachment, rebutting arguments that the DEED process insulates such statements from use in court.
  • Employers retain traditional evidentiary objections (e.g., relevance, hearsay unless offered as an opposing party’s statement, Rule 403). But § 268.19 itself no longer provides an evidentiary shield.
• Policy balance:
  • The ruling preserves candid employer cooperation with DEED by immunizing them from suits based on the DEED submission itself, while maintaining the truth-seeking function of civil trials by allowing relevant DEED information as evidence when the claim is based on separate conduct.
• Unresolved edges:
  • Although the statute broadly refers to “information obtained,” the Court’s holding speaks in terms of shielding employers. Whether the immunity equally protects non-employer informants was not before the Court.
  • The opinion does not decide the scope of § 268.105, subd. 5(b)’s limits on “hearing testimony” in DEED appeals, nor whether a questionnaire qualifies as “testimonial.”

Complex Concepts Simplified

• Absolute privilege (immunity) vs. evidentiary privilege (confidentiality):
  • Absolute privilege (as here) is immunity from civil liability for the content of a statement made on a protected occasion (e.g., to DEED to determine benefits). It stops you from being sued for what you said in that context.
  • Evidentiary privilege (e.g., attorney–client under § 595.02) is a right to withhold evidence from court proceedings. It controls admissibility and discoverability of communications.
• “Subject matter or the basis for any civil proceeding”:
  • A claim is barred if it seeks to impose liability for the very act or content of the communication to DEED (e.g., “Your DEED statement defamed me”).
  • A claim is not barred when it challenges separate conduct (e.g., failure to accommodate in the workplace), even if DEED submissions are used as evidence of that conduct.
• Harmless error:
  • Even if a court makes a legal mistake (e.g., excluding evidence), a new trial is not warranted unless the error “might reasonably have changed the result.” If the excluded evidence is cumulative—that is, it just repeats what the factfinder already heard—there is no prejudice.
• Terms of art and statutory interpretation:
  • When statutes use specialized legal terminology (like “absolute privilege”), courts presume the Legislature intended the established legal meaning, unless context clearly indicates otherwise.

Practice Notes

• For employees/plaintiffs:
  • Seek DEED forms and employer submissions in discovery. Consider admissibility via Minnesota Rules of Evidence (e.g., as statements of a party opponent, not hearsay; relevance; Rule 403 balancing).
  • Do not plead civil claims predicated on the content of employer DEED submissions (e.g., defamation based on the questionnaire), as § 268.19, subd. 2(c) provides immunity.
• For employers/defendants:
  • Continue candid reporting to DEED; your statements to DEED are immunized against suits based on their content, but they can be used as evidence in other litigation.
  • Prepare for DEED statements to appear in MHRA or other civil cases; ensure accuracy and consistency with internal records and communications.
  • When opposing admission, use traditional evidentiary objections rather than relying on § 268.19 as an evidentiary bar.
• For trial courts:
  • Do not treat § 268.19, subd. 2(c) as a rule of inadmissibility. Conduct ordinary evidentiary analysis if parties offer DEED submissions in non-DEED proceedings.
  • Assess “subject matter or basis” carefully: claims predicated on DEED statements are barred; claims about independent conduct are not.

Conclusion

McBee v. Team Industries, Inc. establishes a clear rule: “absolutely privileged” in Minn. Stat. § 268.19, subd. 2(c) is an immunity from civil liability, not a categorical evidentiary exclusion. The statute protects employers from being sued over what they tell DEED for unemployment determinations, but it does not shield those communications from evidentiary use in other civil cases where the claim is based on separate underlying conduct.

Applying that rule, the Supreme Court held that the DEED Questionnaire was not barred by § 268.19 and should not have been excluded. Still, the exclusion was harmless because the bench trial record independently established that Team did not attempt accommodations. The judgment for Team was therefore affirmed on different grounds.

The decision recalibrates Minnesota practice: it preserves candid employer cooperation with DEED through immunity for DEED-submitted statements, while ensuring courts retain access to relevant evidence in civil litigation unrelated to the DEED communication itself. Going forward, litigants and courts should treat § 268.19 as a liability shield when DEED statements are the gravamen of a claim, not as a blanket evidentiary privilege.