Tensions in the competitive HR tech industry have escalated sharply as Rippling files a dramatic lawsuit against its rival, Deel. On Monday morning, Rippling unveiled a 50-page legal complaint accusing Deel of racketeering, misappropriation of trade secrets, unfair competition, and aiding in a breach of fiduciary duty. At the heart of this explosive case is the claim that a Rippling employee secretly worked as a “spy” for Deel.
Deel has firmly denied the allegations, responding in a statement to TechCrunch that called the claims “sensationalized.” Deel pushed back, adding that Rippling was attempting to divert attention from its own legal troubles, including alleged violations of Russian sanctions law. Deel stated, “We deny all legal wrongdoing and look forward to asserting our counterclaims.”
The lawsuit underscores the fierce rivalry between Rippling and Deel, both valued at over $12 billion and offering comprehensive HR, payroll, and compliance platforms for global businesses. As the economic climate tightens, competition for market share has intensified. Last year, Rippling publicly targeted Deel with an aggressive marketing campaign, launching a “Snake Game” that painted Deel as deceitful and expensive.
Tensions further escalated when a Deel sales director visited the Snake Game site, engaged with Rippling’s chatbot, and later found his interaction posted on Twitter by Rippling’s COO. The incident backfired, drawing criticism over perceived doxxing.
Now, the lawsuit reveals that Slack forensics played a critical role in uncovering what Rippling calls a deliberate espionage plot. Rippling alleges that an employee, referred to as D.S., began suspiciously monitoring Slack channels unrelated to his payroll duties starting in November 2024. Activity logs showed D.S. accessed channels focused on Rippling’s most sensitive sales strategies, with an obsession around any mention of Deel.
Rippling claims that D.S. viewed these confidential channels over 450 times, downloaded sensitive files, and even assisted Deel in trying to poach Rippling employees. To confirm their suspicions, Rippling says it set up a “honeypot” — a fake Slack channel suggesting it contained damaging information about Deel — and tipped off Deel executives about it. Shortly after, D.S. allegedly searched for the fake channel.
Matters turned even more dramatic when Rippling, acting on a court order, attempted to seize D.S.’s phone. According to the lawsuit, D.S. locked himself in a bathroom, refused to come out, and was heard by the independent solicitor making noises and flushing the toilet. Rippling claims this suggests D.S. may have attempted to destroy his phone to avoid handing it over.
Ultimately, D.S. exited the bathroom, defied warnings about violating a court order, and fled the scene. Rippling has not confirmed whether further legal action against D.S. is forthcoming, but the company provided enough details in the filing that D.S.’s identity was easily traced to his now-deleted LinkedIn profile.
As this high-stakes legal battle unfolds, it shines a spotlight on just how cutthroat the competition has become in the HR technology space. With billion-dollar valuations on the line, the fight between Rippling and Deel appears far from over.
