Rippling Accuses Deel of Running a ‘Criminal Syndicate’ and Spying on Multiple Competitors
The battle between HR tech startups has escalated dramatically as Rippling filed an amended 84-page complaint in its ongoing lawsuit against Deel, accusing the latter of extensive corporate espionage. According to the complaint, Deel allegedly targeted, infiltrated, and compromised not only Rippling but also four other competitors.
While the revised complaint doesn’t explicitly name all the alleged victims, it identifies Toku, a cryptocurrency-based tax and payroll compliance company, as one of them. Toku is also pursuing legal action against its competitor LiquiFi, alleging similar corporate espionage with potential involvement from Deel. Toku is suing its competitor LiquiFi, also alleging
Rippling further alleges that “Victim-3” is a startup accelerator that previously partnered with Deel. The identity of this accelerator remains undisclosed in the complaint. The lawsuit also points to other unnamed victims who are “major competitors of Deel” in the employer of record market, suggesting that more companies may come forward with details.
In response to the allegations, a Deel spokesperson dismissed Rippling’s claims as “far fetched” and stated that the amended complaint fails to address the flaws in the original lawsuit.
Rippling’s amended suit alleges that Deel’s CEO Alex Bouaziz was the direct mastermind, sharing screenshots of messages as its evidence. The complaint goes as far as implying potential criminal conduct, describing Deel as a “criminal syndicate.”
The amended lawsuit includes charges under the federal racketeering (RICO) statute, the Defend Trade Secrets Act, and California state law. It directly names Alex Bouaziz, his father Philippe Bouaziz (Chairman and CFO), and Deel’s COO, Daniel Westgarth.
Alex Spiro, Rippling’s lead attorney from Quinn Emanuel, is a former prosecutor. His involvement and use of terms like “criminal syndicate” indicate a deliberate legal strategy.
A source familiar with the case suggests that federal prosecutors are actively investigating the allegations against Deel. However, a Deel spokesperson denies this, stating, “We are not aware of any active investigations into our business… Rippling has a long history of making false or sensationalized allegations to governmental authorities about competitors.”
The complaint highlights a previous incident where a Rippling employee confessed to spying for Deel, admitting to providing sales leads, product roadmaps, customer accounts, and other confidential information. Rippling is suing Deel for misappropriation of trade secrets, tortious interference, and unfair competition.
Deel has counter-sued, accusing Rippling of spying by impersonating a customer to obtain non-public product information. The Deel spokesperson insists on the strength of their allegations, stating, “We are winning in the marketplace, we stand by our own lawsuit, and we will be vindicated in court as well.”
The legal battle between Rippling and Deel continues to intensify, showing no signs of resolution.
