HR tech company Rippling sues rival Deel for alleged corporate espionage
Human Resources technology firm Rippling initiated a lawsuit against Deel on Monday, alleging racketeering, misappropriation of trade secrets, unfair competition, and complicity in a breach of fiduciary duty.
The 50-page lawsuit centers on claims that a previous Rippling employee served as a corporate spy for Deel.
Deel has rejected the allegations, labeling the lawsuit as a maneuver to divert attention from Rippling’s own issues. “Just weeks after Rippling faced accusations of breaching sanctions law in Russia and spreading false information about Deel, they are attempting to change the narrative with these exaggerated claims,” a Deel representative informed TechCrunch, adding that Deel plans to file counterclaims.
As competitors in the HR technology market, both Rippling and Deel provide comprehensive platforms for payroll, recruitment, and workforce management. With Rippling being valued at $13 billion and Deel at over $12 billion, both companies are in a tight race for market leadership.
Evidence of rising tensions has been apparent. Last year, Rippling introduced a marketing campaign showcasing a “Snake Game” that depicted Deel as a snake charging inflated fees. Deel executives interacted with a chatbot on the campaign’s website, which led to Rippling’s COO later sharing that exchange on Twitter—a move that was criticized for perceived doxxing.
Rippling's lawsuit claims that an employee, referred to only as "D.S.," accessed confidential Slack channels pertaining to the firm's sales, business strategy, and competitive intelligence on Deel more than 450 times—significantly exceeding the requirements of his payroll operations position.
To verify their suspicions, Rippling established a “honeypot” by crafting a fake Slack channel with an alluring name that hinted at sensitive information about Deel. The company subsequently monitored whether D.S. searched for it—allegedly, he did.
The situation escalated when an independent solicitor attempted to seize D.S.’s phone under a court order. According to the lawsuit, D.S. barricaded himself in a bathroom and was heard making sounds on his phone before flushing it—suggesting, Rippling argues, that he might have attempted to destroy evidence. When confronted, D.S. reportedly said, “I’m willing to take that risk,” before leaving the office in a hurry.
Although the lawsuit has not explicitly named D.S., the specifics regarding his role and time at Rippling have made it relatively straightforward for observers to identify him. His LinkedIn profile has since been removed.
With Deel gearing up for counterclaims and the HR tech landscape growing increasingly competitive, this legal conflict is expected to be far from resolved peacefully.
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