Rippling Sues Deel Over Alleged Corporate Espionage
Human resources software startup Rippling has filed a lawsuit against competitor Deel in federal court, alleging Deel orchestrated a corporate espionage scheme. According to Rippling’s complaint filed in the U.S. District Court for California’s Northern District, Deel “cultivated a spy” who accessed confidential information and passed it to a reporter.
The Allegations: Trade Secret Theft
Rippling claimed Deel violated the Racketeer Influenced and Corrupt Organizations Act (RICO) and misappropriated trade secrets. The lawsuit alleges that a Rippling employee, hired in 2023 for a management role, acted as a spy for Deel. This employee allegedly accessed sensitive data about Rippling’s clients, sales processes, and competitive strategies through internal Slack channels.
Rippling also claims that in December 2023, the employee met with Deel executives and shared this information. Evidence of the breach surfaced when a reporter from The Information sent inquiries to Rippling in February 2024, citing leaked Slack messages.
Spy Locked Himself in a Bathroom to Delete Data
Rippling took legal action by obtaining a court order in Dublin, Ireland, requiring the employee to preserve information on his mobile device. However, Rippling’s filing alleges that the spy lied about the phone’s location, locked himself in a bathroom, and attempted to delete evidence despite repeated warnings from a court-appointed solicitor.
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Deel Denies Allegations
In response, Deel denied any wrongdoing. “We deny all legal wrongdoing and look forward to asserting our counterclaims,” a Deel spokesperson said, adding that Rippling’s claims are an attempt to distract from recent accusations against Rippling regarding sanctions law violations in Russia.
A History of Legal Drama
This is not Rippling CEO Parker Conrad’s first legal dispute. His previous startup, Zenefits, was sued by ADP in 2015 for allegedly obtaining client data to provide payment services. That lawsuit was later dropped.
What’s Next?
As the legal battle between Rippling and Deel unfolds, the tech industry is watching closely to see how this high-stakes conflict between two of the world’s most valuable HR startups plays out.
