diff --git a/package.json b/package.json
index 4f7ddc3..0b0dae4 100644
--- a/package.json
+++ b/package.json
@@ -5,7 +5,7 @@
   "type": "module",
   "scripts": {
     "check:syntax": "node --check public/app-runtime.js && node --check public/service-worker.js && node --check public/legacy/bootstrap.js && node --check public/core/sun-safe.js && node --check public/core/performance.js && node --check public/core/auth-security-v1774.js && node --check public/core/data-layer-v1773.js && node --check public/core/server-automation-v1770.js && node --check public/core/hotfix-v1763.js && node --check public/core/ops-ux-v1762.js && node --check public/core/ux-fixes-v1764.js && node --check public/core/pdf-engine.js && node --check public/core/classic-offer-pdf-v1767.js && node --check public/core/developer-console-v1768.js && node --check public/core/offer-workspace-v1769.js",
-    "test:static": "node tests/static-security.mjs && node tests/auth-security-v1774.mjs",
+    "test:static": "node tests/static-security.mjs && node tests/auth-security-v1774.mjs && node tests/employee-create-v1774.mjs",
     "check:release": "node tests/release-check.mjs",
     "check:deploy": "npm run check:syntax && npm run test:static && npm run check:release",
     "test:e2e": "playwright test --config=tests/playwright.config.mjs",
diff --git a/supabase/functions/caterium-create-employee/index.ts b/supabase/functions/caterium-create-employee/index.ts
index 5e31f54..9c57489 100644
--- a/supabase/functions/caterium-create-employee/index.ts
+++ b/supabase/functions/caterium-create-employee/index.ts
@@ -9,6 +9,14 @@ const cors = {
 };
 const reply = (body: unknown, status = 200) => new Response(JSON.stringify(body), { status, headers: cors });
 
+type PrepData = {
+  status?: string;
+  user_id?: string | null;
+  email?: string;
+  display_name?: string;
+  role?: string;
+};
+
 Deno.serve(async (req: Request) => {
   if (req.method === "OPTIONS") return new Response("ok", { headers: cors });
   if (req.method !== "POST") return reply({ error: "Method not allowed" }, 405);
@@ -18,6 +26,7 @@ Deno.serve(async (req: Request) => {
     const anon = Deno.env.get("SUPABASE_ANON_KEY") || "";
     const serviceKey = Deno.env.get("SUPABASE_SERVICE_ROLE_KEY") || "";
     if (!url || !anon || !serviceKey) return reply({ error: "Server auth configuration is incomplete" }, 500);
+
     const caller = createClient(url, anon, {
       global: { headers: { Authorization: auth } },
       auth: { persistSession: false, autoRefreshToken: false },
@@ -28,21 +37,66 @@ Deno.serve(async (req: Request) => {
     const email = String(body.email || "").trim().toLowerCase();
     const displayName = String(body.display_name || "").trim();
     const role = String(body.role || "manager");
-    const prep = await caller.rpc("sun_employee_prepare_v28", {
-      p_workspace: workspaceId,
-      p_email: email,
-      p_display_name: displayName,
-      p_role: role,
-    });
-    if (prep.error) return reply({ error: prep.error.message }, 400);
-    if (prep.data?.status !== "new") {
-      return reply({ status: prep.data?.status, user_id: prep.data?.user_id, email, display_name: displayName, role }, 200);
+
+    const prepare = async () => {
+      const result = await caller.rpc("sun_employee_prepare_v28", {
+        p_workspace: workspaceId,
+        p_email: email,
+        p_display_name: displayName,
+        p_role: role,
+      });
+      if (result.error) throw new Error(result.error.message);
+      return (result.data || {}) as PrepData;
+    };
+
+    const finalize = async (userId: string, created: boolean, temporaryPassword: string | null = null) => {
+      const fin = await caller.rpc("sun_employee_finalize_v28", {
+        p_workspace: workspaceId,
+        p_user_id: userId,
+        p_display_name: displayName,
+        p_role: role,
+      });
+      if (fin.error) throw new Error(fin.error.message);
+      return reply({
+        ...fin.data,
+        created,
+        temporary_password: temporaryPassword,
+        must_change_password: created,
+      });
+    };
+
+    const prep = await prepare();
+    const prepStatus = String(prep.status || "");
+
+    if (prepStatus === "already_member") {
+      return reply({
+        status: "already_member",
+        user_id: prep.user_id,
+        email: prep.email || email,
+        display_name: prep.display_name || displayName,
+        role: prep.role || role,
+        created: false,
+        temporary_password: null,
+        must_change_password: false,
+      });
     }
+
+    if (prepStatus === "existing") {
+      const existingUserId = String(prep.user_id || "");
+      if (!existingUserId) return reply({ error: "Existing employee account has no user id" }, 409);
+      return await finalize(existingUserId, false, null);
+    }
+
+    if (prepStatus !== "new") {
+      return reply({ error: `Unexpected employee prepare status: ${prepStatus || "empty"}` }, 409);
+    }
+
     const alphabet = "ABCDEFGHJKLMNPQRSTUVWXYZabcdefghijkmnopqrstuvwxyz23456789";
     const bytes = crypto.getRandomValues(new Uint8Array(12));
     let password = "";
     for (const b of bytes) password += alphabet[b % alphabet.length];
     password = password.slice(0, 6) + "-" + password.slice(6);
+
     const created = await service.auth.admin.createUser({
       email,
       password,
@@ -53,15 +107,31 @@ Deno.serve(async (req: Request) => {
         registration_source: "caterium_employee_admin",
       },
     });
-    if (created.error || !created.data.user) return reply({ error: created.error?.message || "Create failed" }, 400);
-    const fin = await caller.rpc("sun_employee_finalize_v28", {
-      p_workspace: workspaceId,
-      p_user_id: created.data.user.id,
-      p_display_name: displayName,
-      p_role: role,
-    });
-    if (fin.error) return reply({ error: fin.error.message }, 400);
-    return reply({ ...fin.data, created: true, temporary_password: password, must_change_password: true });
+
+    if (created.error || !created.data.user) {
+      // A concurrent request or a previous partial failure may have created Auth already.
+      // Re-read server state and finalize the existing account instead of leaving the workspace half-configured.
+      const retryPrep = await prepare();
+      const retryStatus = String(retryPrep.status || "");
+      if (retryStatus === "already_member") {
+        return reply({
+          status: "already_member",
+          user_id: retryPrep.user_id,
+          email: retryPrep.email || email,
+          display_name: retryPrep.display_name || displayName,
+          role: retryPrep.role || role,
+          created: false,
+          temporary_password: null,
+          must_change_password: false,
+        });
+      }
+      if (retryStatus === "existing" && retryPrep.user_id) {
+        return await finalize(String(retryPrep.user_id), false, null);
+      }
+      return reply({ error: created.error?.message || "Create failed" }, 400);
+    }
+
+    return await finalize(created.data.user.id, true, password);
   } catch (e) {
     return reply({ error: e instanceof Error ? e.message : String(e) }, 500);
   }
diff --git a/tests/employee-create-v1774.mjs b/tests/employee-create-v1774.mjs
new file mode 100644
index 0000000..82a9847
--- /dev/null
+++ b/tests/employee-create-v1774.mjs
@@ -0,0 +1,10 @@
+import fs from 'node:fs';
+const src=fs.readFileSync('supabase/functions/caterium-create-employee/index.ts','utf8');
+let bad=0;const check=(v,m)=>{console.log(`${v?'OK':'FAIL'}: ${m}`);if(!v)bad++};
+check(src.includes('prepStatus === "already_member"'),'already_member returns without duplicate creation');
+check(src.includes('prepStatus === "existing"'),'existing auth user is handled explicitly');
+check(src.includes('return await finalize(existingUserId, false, null)'),'existing auth user is finalized into workspace membership');
+check(src.includes('retryStatus === "existing"'),'partial/concurrent auth creation retries finalize');
+check(src.includes('sun_employee_finalize_v28'),'employee finalize RPC remains required');
+check(!src.includes('if (prep.data?.status !== "new")'),'old early-return bug is removed');
+if(bad)process.exit(1);