diff --git a/apps/api/src/auth/user.ts b/apps/api/src/auth/user.ts
index b2e0c79..3a0339f 100644
--- a/apps/api/src/auth/user.ts
+++ b/apps/api/src/auth/user.ts
@@ -8,7 +8,7 @@
  * Source: RESEARCH.md § "User upsert with color assignment"
  */
 
-import { and, eq, sql } from 'drizzle-orm'
+import { and, eq } from 'drizzle-orm'
 import { db } from '../db/client.js'
 import { users } from '../db/schema.js'
 
@@ -101,13 +101,18 @@ export async function upsertUser(
     return existing[0]
   }
 
-  // 2. Count existing users to determine round-robin color slot
-  const countResult = await db
-    .select({ count: sql<number>`COUNT(*)` })
-    .from(users)
-
-  const count = Number(countResult[0]?.count ?? 0)
-  const color = COLOR_PALETTE[count % COLOR_PALETTE.length]
+  // 2. Assign the first palette color NOT already in use by another member.
+  //    A plain COUNT(*) % palette collides under deletions: a deleted user
+  //    shifts the count so the next insert reuses an in-use slot (observed in
+  //    Gate 2 — two members both got #E8734A). Selecting the first unused color
+  //    guarantees distinct, stable colors for up to COLOR_PALETTE.length members
+  //    (AUTH-03). Falls back to round-robin by count only once the palette is
+  //    exhausted (more members than colors).
+  const usedRows = await db.select({ color: users.color }).from(users)
+  const usedColors = new Set(usedRows.map((r) => r.color))
+  const color =
+    COLOR_PALETTE.find((c) => !usedColors.has(c)) ??
+    COLOR_PALETTE[usedColors.size % COLOR_PALETTE.length]
 
   // 3. Insert new user row
   // mysql2 has no RETURNING clause — use $returningId() then re-select
diff --git a/apps/api/tests/auth/user.test.ts b/apps/api/tests/auth/user.test.ts
index 0d9aae3..560f3ed 100644
--- a/apps/api/tests/auth/user.test.ts
+++ b/apps/api/tests/auth/user.test.ts
@@ -68,7 +68,7 @@ describe('upsertUser', () => {
     const sub = 'user-sub-001'
 
     // First select: no existing user
-    // Second select (count): count = 0
+    // Second select (used colors): no existing users → no colors in use → palette[0]
     // Third select (re-fetch after insert): return the inserted row
     let selectCallCount = 0
     mockDb.select.mockImplementation(() => {
@@ -78,9 +78,9 @@ describe('upsertUser', () => {
         return makeSelectChain([])
       }
       if (selectCallCount === 2) {
-        // COUNT(*) query — 0 users
+        // Used-colors query — no existing users
         return {
-          from: vi.fn().mockResolvedValue([{ count: 0 }]),
+          from: vi.fn().mockResolvedValue([]),
         }
       }
       // Re-fetch after insert
@@ -109,9 +109,10 @@ describe('upsertUser', () => {
         return makeSelectChain([]) // not found
       }
       if (selectCallCount === 2) {
-        // COUNT(*) — 1 existing user
+        // Used-colors query — one existing user already holds palette[0],
+        // so the next member must get the first unused color: palette[1].
         return {
-          from: vi.fn().mockResolvedValue([{ count: 1 }]),
+          from: vi.fn().mockResolvedValue([{ color: COLOR_PALETTE[0] }]),
         }
       }
       return makeSelectChain([
@@ -126,6 +127,39 @@ describe('upsertUser', () => {
     expect(user!.color).toBe(COLOR_PALETTE[1])
   })
 
+  // Regression (Gate 2): a new member must get a color NOT already in use, even
+  // after a deletion. The old COUNT(*) % palette logic reused an in-use slot
+  // when the user count had shifted (two members both got #E8734A). With colors
+  // [0] and [2] taken (slot [1] freed by a delete), the next member fills [1].
+  it('assigns the first UNUSED palette color (no collision after deletions)', async () => {
+    const iss = 'https://auth.example.com'
+    const sub = 'user-sub-005'
+
+    let selectCallCount = 0
+    mockDb.select.mockImplementation(() => {
+      selectCallCount++
+      if (selectCallCount === 1) return makeSelectChain([]) // not found
+      if (selectCallCount === 2) {
+        // palette[0] and palette[2] in use; palette[1] is free
+        return {
+          from: vi
+            .fn()
+            .mockResolvedValue([{ color: COLOR_PALETTE[0] }, { color: COLOR_PALETTE[2] }]),
+        }
+      }
+      return makeSelectChain([
+        { id: 5, oidcIss: iss, oidcSub: sub, displayName: null, color: COLOR_PALETTE[1], createdAt: new Date() },
+      ])
+    })
+    mockDb.insert.mockReturnValue(makeInsertChain([{ id: 5 }]))
+
+    await upsertUser(iss, sub)
+
+    // The inserted row's color must be the first unused palette entry (palette[1]).
+    const insertValues = mockDb.insert.mock.results[0]?.value?.values.mock.calls[0]?.[0]
+    expect(insertValues.color).toBe(COLOR_PALETTE[1])
+  })
+
   it('returns the same user row on re-upsert (idempotent — no duplicate insert)', async () => {
     const iss = 'https://auth.example.com'
     const sub = 'user-sub-001'