diff --git a/.github/workflows/rust.yml b/.github/workflows/rust.yml
index 6c7a988b..c4dbd46c 100644
--- a/.github/workflows/rust.yml
+++ b/.github/workflows/rust.yml
@@ -146,6 +146,24 @@ jobs:
         run: install ostree-ext-cli /usr/bin && rm -v ostree-ext-cli
       - name: Integration tests
         run: ./ci/priv-integration.sh
+  privtest-cockpit:
+    name: "Privileged testing (cockpit)"
+    needs: build
+    runs-on: ubuntu-latest
+    container:
+      image: quay.io/fedora/fedora-bootc:41
+      options: "--privileged --pid=host -v /var/tmp:/var/tmp -v /run/dbus:/run/dbus -v /run/systemd:/run/systemd -v /:/run/host"
+    steps:
+      - name: Checkout repository
+        uses: actions/checkout@v4
+      - name: Download
+        uses: actions/download-artifact@v4.1.7
+        with:
+          name: ostree-ext-cli
+      - name: Install
+        run: install ostree-ext-cli /usr/bin && rm -v ostree-ext-cli
+      - name: Integration tests
+        run: ./ci/priv-test-cockpit-selinux.sh
   container-build:
     name: "Container build"
     needs: build
diff --git a/ci/priv-test-cockpit-selinux.sh b/ci/priv-test-cockpit-selinux.sh
new file mode 100755
index 00000000..2d71038d
--- /dev/null
+++ b/ci/priv-test-cockpit-selinux.sh
@@ -0,0 +1,32 @@
+#!/bin/bash
+# Assumes that the current environment is a privileged container
+# with the host mounted at /run/host.  We can basically write
+# whatever we want, however we can't actually *reboot* the host.
+set -euo pipefail
+
+sysroot=/run/host
+stateroot=test-cockpit
+repo=$sysroot/ostree/repo
+image=registry.gitlab.com/fedora/bootc/tests/container-fixtures/cockpit
+imgref=ostree-unverified-registry:${image}
+
+cd $(mktemp -d -p /var/tmp)
+
+set -x
+
+if test '!' -e "${sysroot}/ostree"; then
+    ostree admin init-fs --epoch=1 "${sysroot}"
+    ostree config --repo $repo set sysroot.bootloader none
+fi
+ostree admin stateroot-init "${stateroot}" --sysroot "${sysroot}"
+ostree-ext-cli container image deploy --sysroot "${sysroot}" \
+    --stateroot "${stateroot}" --imgref "${imgref}"
+ref=$(ostree refs --repo $repo ostree/container/image | head -1)
+commit=$(ostree rev-parse --repo $repo ostree/container/image/$ref)
+ostree ls --repo $repo -X ${commit} /usr/lib/systemd/system|grep -i cockpit >out.txt
+if ! grep -q :cockpit_unit_file_t:s0 out.txt; then
+    echo "failed to find cockpit_unit_file_t" 1>&2
+    exit 1
+fi
+
+echo ok "derived selinux"
diff --git a/lib/src/container/store.rs b/lib/src/container/store.rs
index 23c718d5..a275c0af 100644
--- a/lib/src/container/store.rs
+++ b/lib/src/container/store.rs
@@ -861,6 +861,7 @@ impl ImageImporter {
 
         let mut layer_commits = Vec::new();
         let mut layer_filtered_content: MetaFilteredData = HashMap::new();
+        let have_derived_layers = !import.layers.is_empty();
         for layer in import.layers {
             if let Some(c) = layer.commit {
                 tracing::debug!("Reusing fetched commit {}", c);
@@ -990,7 +991,19 @@ impl ImageImporter {
                 let modifier =
                     ostree::RepoCommitModifier::new(ostree::RepoCommitModifierFlags::CONSUME, None);
                 modifier.set_devino_cache(&devino);
-                modifier.set_sepolicy_from_commit(repo, &base_commit, cancellable)?;
+                // If we have derived layers, then we need to handle the case where
+                // the derived layers include custom policy. Just relabel everything
+                // in this case.
+                if have_derived_layers {
+                    let rootpath = td.open_dir(rootpath)?;
+                    let sepolicy = ostree::SePolicy::new_at(rootpath.as_raw_fd(), cancellable)?;
+                    tracing::debug!("labeling from merged tree");
+                    modifier.set_sepolicy(Some(&sepolicy));
+                } else {
+                    tracing::debug!("labeling from base tree");
+                    // TODO: We can likely drop this; we know all labels should be pre-computed.
+                    modifier.set_sepolicy_from_commit(repo, &base_commit, cancellable)?;
+                }
 
                 let mt = ostree::MutableTree::new();
                 repo.write_dfd_to_mtree(