In the case of New Orleans & Northeastern Railroad Company et al. v. Scarlet, 1918, the United States Supreme Court ruled in favor of the railroad company and overturned a Mississippi state court decision that had awarded damages to Mr. Scarlet for injuries he sustained while working as an employee for the railroad company. The Supreme Court held that under federal law (the Federal Employers' Liability Act), negligence on part of the employer must be proven to hold them liable for any injury suffered by an employee during their employment period; it is not enough just to show that injury occurred at work or due to work conditions without showing fault on part of employer's conduct or management decisions leading directly or indirectly towards such harm caused.

In the dissenting opinion for New Orleans & Northeastern Railroad Company v. Scarlet, it was argued that the majority's decision to hold a railroad company liable for injuries suffered by an employee who was not on duty and had no business being in the area where he got injured, set a dangerous precedent. The dissenting justices believed that this ruling expanded employers' liability beyond reasonable limits. They contended that while employers should be held responsible for providing safe working conditions and ensuring their employees are not harmed due to negligence during work hours or within designated work areas, they cannot reasonably be expected to prevent all potential accidents everywhere on their property at all times. This would place an undue burden on businesses and could potentially lead to frivolous lawsuits from individuals seeking compensation for injuries sustained under circumstances where the employer has little control or foreknowledge of risk.