diff --git a/tests/unit/agent-hierarchy-cycle.test.ts b/tests/unit/agent-hierarchy-cycle.test.ts
new file mode 100644
index 00000000..249c91df
--- /dev/null
+++ b/tests/unit/agent-hierarchy-cycle.test.ts
@@ -0,0 +1,79 @@
+import { mkdtemp, rm } from "node:fs/promises";
+import { tmpdir } from "node:os";
+import { join } from "node:path";
+import { afterEach, beforeAll, beforeEach, describe, expect, it, vi } from "vitest";
+import { AppDatabase } from "../../src/main/database";
+
+beforeAll(() => {
+  process.env.AGENTCOMPANY_ALLOW_INSECURE_VAULT = "true";
+});
+
+vi.mock("electron", () => ({
+  safeStorage: {
+    isEncryptionAvailable: () => false,
+    getSelectedStorageBackend: () => "basic_text",
+    encryptString: (value: string) => Buffer.from(value, "utf8"),
+    decryptString: (value: Buffer) => value.toString("utf8"),
+  },
+}));
+
+describe("agent hierarchy cycle guard", () => {
+  let tempDir: string;
+  let db: AppDatabase;
+  let companyId: string;
+
+  beforeEach(async () => {
+    tempDir = await mkdtemp(join(tmpdir(), "agentcompany-hierarchy-"));
+    db = new AppDatabase(tempDir);
+    db.init();
+    companyId = db.company.saveCompany({
+      name: "Hierarchy Guard Co",
+      description: "Tests reporting relationships.",
+      status: "active",
+    });
+  });
+
+  afterEach(async () => {
+    db.close();
+    await rm(tempDir, { recursive: true, force: true });
+  });
+
+  it("rejects direct self-reporting", () => {
+    expect(() => saveAgent("agent-self", "agent-self")).toThrow("Agent reporting relationship would create a cycle.");
+  });
+
+  it("rejects assigning a manager to one of its descendants", () => {
+    saveAgent("ceo", null);
+    saveAgent("cto", "ceo");
+    saveAgent("engineer", "cto");
+
+    expect(() => saveAgent("ceo", "engineer")).toThrow("Agent reporting relationship would create a cycle.");
+  });
+
+  it("allows acyclic hierarchy updates", () => {
+    saveAgent("ceo", null);
+    saveAgent("cto", "ceo");
+    saveAgent("engineer", "cto");
+
+    saveAgent("engineer", "ceo");
+
+    expect(db.entityCrud.getAgent("engineer").reportsTo).toBe("ceo");
+  });
+
+  function saveAgent(id: string, reportsTo: string | null): string {
+    return db.agents.saveAgent({
+      id,
+      companyId,
+      name: id,
+      role: "Engineer",
+      title: id,
+      status: "active",
+      reportsTo,
+      connectorId: "openai-codex",
+      workspaceId: null,
+      model: null,
+      capabilities: "Maintains hierarchy.",
+      budgetMonthlyUsd: 100,
+    });
+  }
+});