Software Startup Rippling Sues Competitor Deel, Claiming a Spy Carried Out 'Corporate Espionage'

HR software startup Rippling has sued competitor Deel, alleging that Deel orchestrated corporate espionage by recruiting an employee within Rippling to steal trade secrets, including customer data, sales strategies, and internal records. The lawsuit (PDF) claims the spy shared confidential information with Deel executives and a reporter, leading to legal action under the Racketeer Influenced and Corrupt Organizations (RICO) Act. Deel denies wrongdoing and plans to counter the claims. CNBC reports: The two startups are among the most world's most valuable. Investors valued Rippling at $13.5 billion in a funding round announced last year, while Deel told media outlets in 2023 that it was worth $12 billion. Deel ranked No. 28 on CNBC's 2024 Disruptor 50 list. '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 CNBC in an email. 'We deny all legal wrongdoing and look forward to asserting our counterclaims.'

Rippling confirmed its findings earlier this month. The company's general counsel sent a letter to three Deel executives that referred to a new Slack channel, and the Deel spy quickly looked for it. Rippling subsequently served a court order to the spy at its office in Dublin, Ireland requiring him to preserve information on his mobile phone. 'Deel's spy lied to the court-appointed solicitor about the location of his phone, and then locked himself in a bathroom -- seemingly in order to delete evidence from his phone -- all while the independent solicitor repeatedly warned him not to delete materials from his device and that his non-compliance was breaching a court order with penal endorsement,' Rippling said in Monday's filing. 'The spy responded: 'I'm willing to take that risk.' He then fled the premises.' 'We always prefer to win by building the best products and we don't turn to the legal system lightly,' Parker Conrad, Rippling's co-founder and CEO, said in a Monday X post. 'But we are taking this extraordinary step to send a clear message that this type of misconduct has no place in our industry.'

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