In the case of Louisville & Nashville Railroad Company v. Gaston, the U.S Supreme Court ruled in favor of the railroad company. The dispute arose when Mr. Gaston was injured while working for the railroad company and sued for damages under Alabama's employer liability laws. However, his employment contract specified that any disputes would be governed by Kentucky law, which did not allow such lawsuits at that time. The court held that since both parties had freely agreed to this provision in their contract, it should be upheld even though it effectively barred Mr. Gaston from seeking compensation for his injuries through a lawsuit against his employer in Alabama courts.

In the dissenting opinion for Louisville & Nashville Railroad Company v. Gaston, it was argued that the court majority had incorrectly applied Alabama law in their decision. The dissenting justices believed that under Alabama law, a railroad company is not liable for injuries to an employee caused by another employee's negligence unless it can be proven that the employer failed to exercise due diligence in hiring or supervising its employees. They contended that there was no evidence presented showing any lack of care on part of the railroad company regarding its duty towards its employees' safety and well-being. Therefore, they disagreed with the majority's ruling holding Louisville & Nashville Railroad Company responsible for damages incurred by Mr. Gaston as a result of his co-worker’s negligent actions.