diff --git a/packages/babel-plugin-minify-mangle-names/__tests__/mangle-names-test.js b/packages/babel-plugin-minify-mangle-names/__tests__/mangle-names-test.js
index e38983089..5fa1c84f2 100644
--- a/packages/babel-plugin-minify-mangle-names/__tests__/mangle-names-test.js
+++ b/packages/babel-plugin-minify-mangle-names/__tests__/mangle-names-test.js
@@ -177,7 +177,7 @@ describe("mangle-names", () => {
   });
 
   // https://phabricator.babeljs.io/T6957
-  xit("labels should not shadow bindings", () => {
+  it("labels should not shadow bindings", () => {
     const source = unpad(`
       function foo() {
         var meh;
@@ -201,6 +201,31 @@ describe("mangle-names", () => {
     expect(transform(source)).toBe(expected);
   });
 
+  // https://github.com/babel/babili/issues/185
+  it("labels should not shadow bindings 2", () => {
+    const source = unpad(`
+      function f(a) {
+        try {
+          a: {
+            console.log(a);
+          }
+        } catch ($a) {}
+      }
+    `);
+
+    const expected = unpad(`
+      function f(b) {
+        try {
+          a: {
+            console.log(b);
+          }
+        } catch (c) {}
+      }
+    `);
+
+    expect(transform(source)).toBe(expected);
+  });
+
   it("should be order independent", () => {
     const source = unpad(`
       function foo() {
diff --git a/packages/babel-plugin-minify-mangle-names/src/index.js b/packages/babel-plugin-minify-mangle-names/src/index.js
index 62222864a..4df3932a8 100644
--- a/packages/babel-plugin-minify-mangle-names/src/index.js
+++ b/packages/babel-plugin-minify-mangle-names/src/index.js
@@ -77,6 +77,68 @@ module.exports = ({ types: t }) => {
     mangle() {
       const mangler = this;
 
+      this.program.traverse({
+        Scopable(path) {
+          const {scope} = path;
+
+          const bindings = scope.getAllBindings();
+          const names = Object.keys(bindings);
+
+          for (let i = 0; i < names.length; i++) {
+            const oldName = names[i];
+            const binding = bindings[oldName];
+
+            if (binding.path.isLabeledStatement()) {
+              const faulty = binding.referencePaths.filter((ref) => {
+                return !(ref.parentPath.isBreakStatement() || ref.parentPath.isContinueStatement());
+              });
+              faulty.forEach((f) => {
+                const index = binding.referencePaths.indexOf(f);
+                if (index > -1) {
+                  binding.referencePaths.splice(index, 1);
+                  binding.references--;
+                  if (binding.references === 0) {
+                    binding.referenced = false;
+                  }
+                }
+              });
+
+              // probably really bad for labels
+              scope.removeBinding(oldName);
+
+              const newBinding = scope.getBinding(oldName);
+              if (newBinding) {
+                // we found a binding in outer scopes
+                faulty.forEach((f) => newBinding.reference(f));
+              } else {
+                // we might have a binding in the same scope
+                // slow
+
+                // register binding
+                path.traverse({
+                  BindingIdentifier(bindingIdPath) {
+                    if (bindingIdPath.parentPath.isLabeledStatement({ label: bindingIdPath.node })) {
+                      return;
+                    }
+                    if (bindingIdPath.node.name === oldName) {
+                      scope.registerDeclaration(bindingIdPath);
+                    }
+                  }
+                });
+
+                // update references
+                const registeredBinding = scope.getBinding(oldName);
+                if (!registeredBinding) {
+                  // I'm not sure what this is - a global?
+                  return;
+                }
+                faulty.forEach((f) => registeredBinding.reference(f));
+              }
+            }
+          }
+        }
+      });
+
       this.program.traverse({
         Scopable(path) {
           const {scope} = path;