In the case of American Railway Express Company v. Daniel, 1925, the U.S Supreme Court ruled in favor of the defendant, Mr. Daniel who was a former employee of American Railway Express Company (AREC). The dispute arose when AREC refused to pay Mr. Daniel for overtime work he had performed during his employment with them on grounds that he was an interstate commerce worker and thus exempt from state labor laws requiring payment for overtime work under Kentucky law where this issue occurred. However, it was found that while some part of his duties involved interstate commerce activities such as handling packages destined for other states or coming from other states; majority portion constituted intrastate tasks like loading and unloading wagons within city limits which were not directly related to interstate commerce operations. Therefore, court held that AREC's refusal to compensate him for extra hours worked violated state labor regulations since they could not establish their claim about him being primarily engaged in interstate trade activities beyond reasonable doubt.

In the dissenting opinion for American Railway Express Company v. Daniel, Justice Oliver Wendell Holmes Jr. argued that the majority's decision was based on an incorrect interpretation of the law and a misunderstanding of its purpose. He contended that it is not necessary to prove negligence in order to recover damages under federal safety laws designed to protect railway workers from injury or death caused by their employer's failure to provide safe working conditions. Instead, he believed these laws were intended as a form of insurance for employees against such risks, with employers being held strictly liable regardless of fault or negligence on their part. Therefore, according to Justice Holmes' view, Mr. Daniel should have been entitled to compensation without having had to demonstrate any specific act or omission amounting to negligence by his employer.