Human Resources tech company Rippling on Monday filed a suit against its Deel, accusing the company of racketeering, misappropriation of trade secrets, unfair competition, and aiding and abetting a breach of fiduciary duty.
The lawsuit, spanning 50 pages, revolves around allegations that a former Rippling employee acted as a corporate spy for Deel.
Deel has denied the claims, dismissing the lawsuit as an attempt to deflect from Rippling’s own controversies. “Weeks after Rippling is accused of violating sanctions law in Russia and seeding falsehoods about Deel, Rippling is trying to shift the narrative with these sensationalized claims,” a Deel spokesperson told TechCrunch, adding that Deel intends to file counterclaims.
Rippling and Deel are fierce competitors in the HR technology sector, both offering all-in-one platforms for payroll, recruitment, and workforce management. With Rippling’s valuation at $13 billion and Deel’s at over $12 billion, the two companies are nearly neck-and-neck, vying for market dominance.
The tension between them has been visible for some time. Last year, Rippling launched a marketing campaign featuring a “Snake Game” that portrayed Deel as a snake charging higher fees. Deel executives also engaged with a chatbot on the campaign’s website, only for Rippling’s COO to later post the exchange on Twitter—an incident that drew criticism for perceived doxxing.
Rippling’s lawsuit alleges that an employee, identified only as “D.S.,” accessed confidential Slack channels related to the company’s sales, business strategy, and competitive intelligence on Deel over 450 times—far beyond what his payroll operations role required.
To confirm its suspicions, Rippling set a “honeypot,” creating a fake Slack channel with an enticing name suggesting sensitive details about Deel. The company then monitored whether D.S. searched for it—allegedly, he did.
When an independent solicitor later attempted to seize D.S.’s phone under a court order, the situation took a dramatic turn. According to the lawsuit, D.S. locked himself in a bathroom and was heard making noises on his phone before flushing the toilet—suggesting, Rippling claims, that he may have tried to destroy evidence. When confronted, D.S. reportedly stated, “I’m willing to take that risk,” before storming out of the office.
The lawsuit has yet to name D.S. outright, but details about his role and tenure at Rippling have made it relatively easy for observers to identify him. His LinkedIn profile has since been deleted.
With Deel preparing counterclaims and the HR tech space more competitive than ever, this legal battle is unlikely to end quietly.
