Deel Accuses Rippling of Corporate Espionage: ‘Impersonating’ a Customer

The ongoing legal battle between HR tech startups Deel and Rippling has taken a dramatic turn, with Deel filing an amended complaint alleging corporate espionage. The central accusation is that a Rippling employee, under the guise of a legitimate Deel customer, gained unauthorized access to Deel’s systems to analyze and copy its global products and business strategies.

This accusation is the latest development in a heated rivalry. Rippling initially sued Deel in March after a Rippling employee confessed in an Irish court to spying on his employer for Deel. Rippling’s lawsuit includes charges of misappropriation of trade secrets and unfair competition.

Deel has since countersued, denying the allegations and making counter-claims of spying against Rippling. The amended complaint provides further details, alleging that a Rippling employee, specifically holding the job title of Competitive Intelligence, spent six months posing as a Deel customer. Deel claims this individual meticulously analyzed, recorded, and copied Deel’s products and business practices for Rippling’s benefit.

The lawsuit doesn’t hold back in its criticism of Rippling’s CEO, Parker Conrad, referencing his past issues at Zenefits and suggesting that Conrad’s actions are driven by a desire for revenge against Andreessen Horowitz, which holds a 20% share in Deel.

Deel also alleges that Rippling has spread false and misleading information about Deel to the press and regulators.

This legal battle seems to originate from a 2023 incident when U.S. Senator Adam Schiff requested an investigation into Deel’s worker classification practices following a Business Insider report. Deel refuted any wrongdoing and claimed the matter was resolved after discussions with Schiff.

The amended complaint reveals a significant financial detail: Deel claims to be profitable for years, generating over $1 billion in annual revenue.

Rippling has stated they are investigating the specific allegations regarding the gathering of product intelligence and maintains a commitment to fair competition and ethical standards. A Rippling spokesperson noted that the amended complaint seemingly retracts some original assertions, including those implying Rippling gained access to Deel’s board-level information.

While the lawsuit provides a glimpse into the intense competition within the HR tech industry, the core issue remains the alleged corporate spying. Rippling accuses Deel of using an employee to extract sensitive information from its internal network, including sales leads and product roadmaps. Deel, conversely, accuses Rippling of gathering information through methods like impersonating customers, a common, though potentially contentious, practice in competitive intelligence.

The tech industry has already begun referencing Rippling’s alleged capture of the corporate spy, highlighting the cultural impact of this ongoing saga.