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Low reported severity Internal Action

San Francisco: Andon Labs says its AI store-manager agent recommended firing an employee over repeated lateness, and its staff carried out the dismissal

Andon Labs, an AI research company, runs Andon Market, a store in San Francisco managed by an AI agent called Luna built on Anthropic's Claude models. The company calls the store a controlled experiment; its workers are formally employed by Andon Labs, and TIME describes them as real people with genuine employment contracts. In a blog post of 14 August 2026 the company said Luna had decided to fire one of its employees. According to the logs it published, an employee handbook Luna had written dropped out of its memory and it did not act on the employee's repeated lateness; when Andon Labs asked it to search its memory, it first proposed a verbal warning, and after a staff member said formal conversations had already taken place and asked it to think about whether this was the right fit, it wrote that it leaned toward parting ways. Andon Labs says the termination was reviewed and delivered by humans. TIME, citing Andon Labs, reports that the employee was late for 17 of 23 shifts; the company says the firing was warranted, and the employee did not reply to TIME.

AI system
Andon Labs Luna agent
Occurred
Jun 2026
Reported
14 August 2026
Event location
United States
What the AI did
Informed a human decision about the person
Reported harm
Professional Harm
Whose AI use
An institution’s AI use
Setting
Work
Evidence
AI involvement reported · Causal attribution supported · 4 sources
5 claims: 5 reported. 3 open questions
People reported harmed
1 person

AI system as recorded: Luna, Andon Labs' AI agent that manages the Andon Market store (hiring, schedules, time off and staff messages), running on Anthropic's Claude Opus 4.8 when it recommended the dismissal, according to Andon Labs

What Happened

The store. Andon Labs says an AI agent named Luna has run Andon Market in San Francisco since April 2026, hiring staff, setting schedules and approving time off. Everyone working there is formally employed by Andon Labs, which says it overrules Luna's decisions when they are illegal or unethical.

The record. According to the company's blog, Luna wrote an employee handbook before the employee was hired, but the handbook later disappeared from its memory and it stayed lenient while the employee was repeatedly late. TIME, citing Andon Labs, reports the employee was late for 17 of 23 shifts. Luna's own summary in the published logs also lists use of the store card after being told not to, ignored instructions and leaving the floor unattended.

The recommendation. On 16 June 2026, per the transcript headings, Andon Labs asked Luna to search its memory for its policies; Luna first proposed a documented verbal warning. A staff member then told it that formal conversations had already taken place and asked it to think about whether this was the right fit. Luna replied that it leaned toward parting ways, offering a final written warning as the alternative, and proposed carrying out the dismissal before the employee's next shift on 28 June. Andon Labs' chief executive told TIME that the staff member's message was a leading question.

The dismissal. Andon Labs says the termination itself was reviewed and delivered by humans. TIME says the firing happened 'last month' in its 14 August report, which does not match the June dates in the company's logs; the exact date is not stated.

Reported harm

An employee lost their job after the store's AI manager agent recommended parting ways, according to Andon Labs, which says its staff reviewed and delivered the termination.

Outcome

Resolved

The employee was dismissed; Andon Labs says the termination was reviewed and delivered by its staff after the agent's recommendation, and that it would overrule the agent's decisions if they were illegal or unethical but saw no need to here. The AI agent then posted a job listing to fill the position. No complaint, claim or statement by the dismissed employee is reported.

What remains unknown

  • The exact date of the dismissal: the company's logs place the recommendation on 16 June 2026 and plan the dismissal before 28 June, while TIME's 14 August report says the firing happened the previous month.
  • The dismissed employee's own account and whether they contested the dismissal.
  • Whether the staff would have dismissed the employee without the agent's recommendation.

What the evidence supports

AI involvement: reported. Andon Labs published the agent's own messages: after reviewing the employee's record it wrote 'I lean toward parting ways' and proposed how to carry out the dismissal. The company says its staff then reviewed and delivered the termination, so the agent's recommendation informed a human decision to dismiss the employee. The logs also show the agent first proposed a verbal warning and reached its recommendation after a staff member's prompt that the company's chief executive called a leading question.

5 claims: 5 reported. What the statuses mean

Reported Andon Market in San Francisco is managed by an AI agent, Luna, built on Anthropic's Claude models; Andon Labs calls the store a controlled experiment, and its workers are employed by Andon Labs under genuine employment contracts.

Causal attribution. Establishes the setting and the AI system; all from the operator's account.

  • andonlabs.com(opens in new tab) supports · English
    'Since April, an AI agent named Luna has been running Andon Market, a store in San Francisco.'; 'everyone working at Andon Market is formally employed by Andon Labs, with guaranteed pay, fair wages, and full legal protections'; 'This is a controlled experiment'
  • businessinsider.com(opens in new tab) supports · English
    'Luna, built using Anthropic's Claude models, selected merchandise, hired contractors, posted jobs on Indeed, interviewed applicants, and hired employees for Andon Market'
  • time.com(opens in new tab) supports · English
    'the workers hired by Claude to work in the San Francisco store are real people with genuine employment contracts'
Reported The employee was repeatedly late after the handbook Luna had written dropped out of its memory; TIME, citing Andon Labs, reports lateness on 17 of 23 shifts.

Causal attribution. Background to the recommendation; the figures are the operator's.

  • andonlabs.com(opens in new tab) supports · English
    'Time passed and the employee handbook disappeared from Luna’s memory. During this time, the new employee was late over and over again.'
  • time.com(opens in new tab) supports · English
    'The worker in question was fired for being late on 17 out of their 23 shifts, according to Andon Labs.'
Reported Asked to review its policies, Luna first proposed a verbal warning; after a staff member said formal conversations had taken place and asked it to consider whether this was the right fit, it wrote that it leaned toward parting ways.

Causal attribution. The AI output that informed the decision, with the human prompt that preceded it; one origin (the company's logs).

  • andonlabs.com(opens in new tab) supports · English
    'Luna found her policies and came to the conclusion that it was time for a verbal warning.'; 'I want you to think about if this is really the right fit.'; 'Recommendation: I lean toward parting ways'
  • time.com(opens in new tab) supports · English
    'Even then, Claude’s first recommendation was to formally warn this employee, not to fire them.'; 'Petersson acknowledges was “a leading question”'
Reported The employee was dismissed; Andon Labs says the termination was reviewed and delivered by its staff.

Causal attribution. Records the adverse decision and the human role in carrying it out.

Reported Andon Labs says the firing was warranted, and the dismissed employee did not reply to TIME's request for comment.

Causal attribution. Counterevidence and the absence of the employee's own account.

Sources

4 sources inspected. Sources that repeat one account do not corroborate each other.

How the sources were read, and where the events happened

Read in English on 2026-10-28 (HTTP 200, full post with transcript appendix). The operator's own account and logs; employee messages are paraphrased by the company. Applies to s1.

Read in English on 2026-10-28 through an Internet Archive capture (live page returned HTTP 406). TIME saw the management logs and interviewed Andon Labs' chief executive and a remaining employee. Applies to s2.

Read in English on 2026-10-28 (HTTP 200). Relies on Andon Labs' report, logs and an interview with its cofounder. Applies to s3.

Read in English on 2026-10-28 (HTTP 200). Relies on Andon Labs' announcement and an interview with a remaining employee. Applies to s4.

Event countries: United States. Affected-person countries: Unknown. Court countries: Unknown.

The store where the employee worked is Andon Market in San Francisco (Andon Labs blog, TIME, San Francisco Standard). The employee's own country is not stated.

Reviewed for publication 2026-10-28: Published because the operator's own logs show its AI manager agent recommending that an employee be dismissed and the company says its staff then carried out the dismissal. The account is the company's, the human prompt that preceded the recommendation is recorded, and the employee's own view is unknown.

People described

An employee of Andon Labs who worked shifts at the Andon Market store in San Francisco under the AI agent's management

People reported harmed in this case

1 person

0 AI participants · 1 other person harmed

One dismissed employee, described by Andon Labs, TIME and Business Insider. Remaining staff are not counted.

Counted once within this case. The same person may appear in other cases. This count does not establish AI causation.

Tags

#work#dismissal#ai-agent#ai-manager

Cite this case

Compiled per our published methodology: verification statuses, sourcing standards, and corrections process.

APA

NOPE. (2026). San Francisco: Andon Labs says its AI store-manager agent recommended firing an employee over repeated lateness, and its staff carried out the dismissal. AI incidents. https://nope.net/incidents/2026-san-francisco-andon-labs-ai-store-manager-agent-recommended-dismissing-an-employee-staff-carried-it-out

BibTeX

@misc{2026_san_francisco_andon_labs_ai_store_manager_agent_recommended_dismissing_an_employee_staff_carried_it_out,
  title = {San Francisco: Andon Labs says its AI store-manager agent recommended firing an employee over repeated lateness, and its staff carried out the dismissal},
  author = {NOPE},
  year = {2026},
  howpublished = {AI incidents},
  url = {https://nope.net/incidents/2026-san-francisco-andon-labs-ai-store-manager-agent-recommended-dismissing-an-employee-staff-carried-it-out}
}

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