diff --git a/lib/crewai/src/crewai/events/listeners/tracing/first_time_trace_handler.py b/lib/crewai/src/crewai/events/listeners/tracing/first_time_trace_handler.py
index eeb46b2aa..3bdef83c0 100644
--- a/lib/crewai/src/crewai/events/listeners/tracing/first_time_trace_handler.py
+++ b/lib/crewai/src/crewai/events/listeners/tracing/first_time_trace_handler.py
@@ -99,7 +99,7 @@ class FirstTimeTraceHandler:
                 self.batch_manager._initialize_backend_batch(
                     user_context=user_context,
                     execution_metadata=execution_metadata,
-                    use_ephemeral=True,
+                    use_ephemeral=self.batch_manager.is_current_batch_ephemeral,
                 )
 
                 if not self.batch_manager.trace_batch_id:
diff --git a/lib/crewai/src/crewai/events/listeners/tracing/trace_listener.py b/lib/crewai/src/crewai/events/listeners/tracing/trace_listener.py
index b022eb582..27012c743 100644
--- a/lib/crewai/src/crewai/events/listeners/tracing/trace_listener.py
+++ b/lib/crewai/src/crewai/events/listeners/tracing/trace_listener.py
@@ -706,13 +706,14 @@ class TraceCollectionListener(BaseEventListener):
             user_context: User context information.
             execution_metadata: Metadata about the execution.
         """
+        use_ephemeral = not self._check_authenticated()
+
         if self.first_time_handler.is_first_time:
             self.batch_manager.initialize_batch(
-                user_context, execution_metadata, use_ephemeral=True
+                user_context, execution_metadata, use_ephemeral=use_ephemeral
             )
             return
 
-        use_ephemeral = not self._check_authenticated()
         self.batch_manager.initialize_batch(
             user_context, execution_metadata, use_ephemeral=use_ephemeral
         )
diff --git a/lib/crewai/tests/tracing/test_tracing.py b/lib/crewai/tests/tracing/test_tracing.py
index 890567631..3b515ca4e 100644
--- a/lib/crewai/tests/tracing/test_tracing.py
+++ b/lib/crewai/tests/tracing/test_tracing.py
@@ -1344,3 +1344,106 @@ class TestFirstTimeHandlerBackendInitGuard:
         mock_send.assert_not_called()
         mock_finalize.assert_not_called()
         mock_fail.assert_called_once()
+
+
+class TestFirstTimeAuthRespected:
+    """Tests for Fix 3: first-time users respect authentication status."""
+
+    def test_first_time_authenticated_uses_non_ephemeral(self):
+        """Authenticated first-time user should use non-ephemeral (use_ephemeral=False)."""
+        with (
+            patch(
+                "crewai.events.listeners.tracing.trace_batch_manager.get_auth_token",
+                return_value="mock_token",
+            ),
+            patch(
+                "crewai.events.listeners.tracing.trace_listener.get_auth_token",
+                return_value="mock_token",
+            ),
+        ):
+            from crewai.events.listeners.tracing.trace_listener import TraceCollectionListener
+
+            listener = TraceCollectionListener.__new__(TraceCollectionListener)
+            listener.first_time_handler = FirstTimeTraceHandler()
+            listener.first_time_handler.is_first_time = True
+            listener.batch_manager = TraceBatchManager()
+
+            with patch.object(
+                listener.batch_manager, "initialize_batch"
+            ) as mock_init_batch:
+                listener._initialize_batch(
+                    user_context={"privacy_level": "standard"},
+                    execution_metadata={"execution_type": "crew"},
+                )
+
+                mock_init_batch.assert_called_once_with(
+                    {"privacy_level": "standard"},
+                    {"execution_type": "crew"},
+                    use_ephemeral=False,
+                )
+
+    def test_first_time_unauthenticated_uses_ephemeral(self):
+        """Unauthenticated first-time user should use ephemeral (use_ephemeral=True)."""
+        with (
+            patch(
+                "crewai.events.listeners.tracing.trace_batch_manager.get_auth_token",
+                return_value="mock_token",
+            ),
+            patch(
+                "crewai.events.listeners.tracing.trace_listener.get_auth_token",
+                return_value=None,
+            ),
+        ):
+            from crewai.events.listeners.tracing.trace_listener import TraceCollectionListener
+
+            listener = TraceCollectionListener.__new__(TraceCollectionListener)
+            listener.first_time_handler = FirstTimeTraceHandler()
+            listener.first_time_handler.is_first_time = True
+            listener.batch_manager = TraceBatchManager()
+
+            with patch.object(
+                listener.batch_manager, "initialize_batch"
+            ) as mock_init_batch:
+                listener._initialize_batch(
+                    user_context={"privacy_level": "standard"},
+                    execution_metadata={"execution_type": "crew"},
+                )
+
+                mock_init_batch.assert_called_once_with(
+                    {"privacy_level": "standard"},
+                    {"execution_type": "crew"},
+                    use_ephemeral=True,
+                )
+
+    def test_first_time_handler_deferred_init_uses_batch_ephemeral_flag(self):
+        """Deferred backend init should use is_current_batch_ephemeral, not hardcoded True."""
+        with patch(
+            "crewai.events.listeners.tracing.trace_batch_manager.get_auth_token",
+            return_value="mock_token",
+        ):
+            bm = TraceBatchManager()
+        bm.current_batch = TraceBatch(
+            user_context={"privacy_level": "standard"},
+            execution_metadata={"execution_type": "crew", "crew_name": "test"},
+        )
+        bm.trace_batch_id = bm.current_batch.batch_id
+        bm.is_current_batch_ephemeral = False  # authenticated user
+
+        handler = FirstTimeTraceHandler()
+        handler.is_first_time = True
+        handler.collected_events = True
+        handler.batch_manager = bm
+
+        with (
+            patch.object(bm, "_initialize_backend_batch") as mock_init,
+            patch.object(bm, "_send_events_to_backend"),
+            patch.object(bm, "finalize_batch"),
+        ):
+            # trace_batch_id stays set (simulating success)
+            mock_init.side_effect = lambda **kwargs: None
+            bm.event_buffer = [MagicMock()]
+            handler._initialize_backend_and_send_events()
+
+            mock_init.assert_called_once()
+            call_kwargs = mock_init.call_args
+            assert call_kwargs.kwargs["use_ephemeral"] is False