diff --git a/.changeset/mosaic-badge-no-shrink.md b/.changeset/mosaic-badge-no-shrink.md
new file mode 100644
index 00000000000..a845151cc84
--- /dev/null
+++ b/.changeset/mosaic-badge-no-shrink.md
@@ -0,0 +1,2 @@
+---
+---
diff --git a/packages/mosaic/src/components/badge/badge.styles.ts b/packages/mosaic/src/components/badge/badge.styles.ts
index aacab9c9c78..97156a8917d 100644
--- a/packages/mosaic/src/components/badge/badge.styles.ts
+++ b/packages/mosaic/src/components/badge/badge.styles.ts
@@ -12,6 +12,7 @@ export const styles = stylex.create({
     paddingInline: space['2'],
     alignItems: 'center',
     display: 'inline-flex',
+    flexShrink: 0,
     fontFamily: fontFamilyVars['--cl-font-family-sans'],
     fontSize: typeScaleVars['--cl-text-xs-size'],
     fontWeight: fontWeightVars['--cl-font-medium'],
diff --git a/packages/mosaic/src/components/entity/entity.browser.test.tsx b/packages/mosaic/src/components/entity/entity.browser.test.tsx
new file mode 100644
index 00000000000..9d6c39af54b
--- /dev/null
+++ b/packages/mosaic/src/components/entity/entity.browser.test.tsx
@@ -0,0 +1,26 @@
+import { cleanup, render, screen } from '@testing-library/react';
+import { afterEach, describe, expect, it } from 'vitest';
+
+import { Badge } from '../badge';
+import { Entity } from './entity';
+
+afterEach(() => cleanup());
+
+describe('Entity.Label', () => {
+  it('truncates the label text and keeps a badge beside it whole', () => {
+    render(
+      <div style={{ width: 160 }}>
+        <Entity.Label>
+          Cameron Alexander Walker
+          <Badge>Default</Badge>
+        </Entity.Label>
+      </div>,
+    );
+
+    const name = screen.getByText('Cameron Alexander Walker');
+    const badgeText = screen.getByText('Default');
+
+    expect(name.scrollWidth).toBeGreaterThan(name.clientWidth);
+    expect(badgeText.scrollWidth).toBe(badgeText.clientWidth);
+  });
+});