A hybrid transmission has a housing with two chambers. One chamber contains electric motors and other transmission components that require a liquid lubricant and coolant such as automatic transmission fluid. The other chamber contains power electronics that must be isolated from the liquid lubricant/coolant. To reduce the number of breather tubes required, it is beneficial if air can move between the chambers. A terminal block cooperates with a separating wall between the two chambers to create a labyrinth seal between the chambers.