diff --git a/browser/base/content/tabcandy/app/drag.js b/browser/base/content/tabcandy/app/drag.js
index c982ae1abbd..b35b3364a24 100644
--- a/browser/base/content/tabcandy/app/drag.js
+++ b/browser/base/content/tabcandy/app/drag.js
@@ -100,7 +100,9 @@ Drag.prototype = {
     var newRect;
 
     // OH SNAP!
-    if (!Keys.meta) { // if we aren't holding down the meta key...
+    if ( !Keys.meta                           // if we aren't holding down the meta key...
+        && !this.item.overlapsWithOtherItems() // and we aren't on top of anything else...
+        ) { 
       newRect = Trenches.snap(bounds,assumeConstantSize,keepProportional);
       if (newRect) { // might be false if no changes were made
         update = true;
diff --git a/browser/base/content/tabcandy/app/items.js b/browser/base/content/tabcandy/app/items.js
index 52838c0dd9c..ecda43b6f0a 100644
--- a/browser/base/content/tabcandy/app/items.js
+++ b/browser/base/content/tabcandy/app/items.js
@@ -237,6 +237,21 @@ window.Item.prototype = {
     Utils.assert('this.bounds', isRect(this.bounds));
     return new Rect(this.bounds);    
   },
+
+  // ----------
+  // Function: overlapsWithOtherItems
+  // Returns true if this Item overlaps with any other Item on the screen.
+  overlapsWithOtherItems: function() {
+		var self = this;
+		var items = Items.getTopLevelItems();
+		var bounds = this.getBounds();
+		return items.some(function(item) {
+			if (item == self) // can't overlap with yourself.
+				return false;
+			var myBounds = item.getBounds();
+			return myBounds.intersects(bounds);
+		} );
+  },
   
   // ----------
   // Function: setPosition