San Francisco tech company accuses competitor of corporate espionage

Rippling, founded in 2016, was most recently valued at $13.5 billion. Deel was founded three years later and is valued at more than $12 billion. The firms are head-to-head competitors in providing workplace management software. 

Monday’s lawsuit alleges that D.S. in November began searching for mentions of Deel in Rippling’s Slack channels. He searched the term “Deel” on average 23 times a day over a four-month period, according to the complaint, with the goal of collecting information about Rippling’s sales pipeline. Details included proposed pricing, conversations between Rippling and prospective customers evaluating a switch away from Deel, and Rippling’s training materials on how to compete against Deel. Over the four months, D.S. pulled information from Rippling’s Slack, Google Drive, Salesforce database, and internal human resources directory, per the lawsuit. 

“We’re all for healthy competition, but we won’t tolerate when a competitor breaks the law,” Rippling’s general counsel, Vanessa Wu, said in a statement. 

Rippling began to suspect a mole when Deel tried to hire at least 17 members of its global payroll operations team via WhatsApp, which requires access to phone numbers. Rippling was also suspicious when a reporter from The Information asked for comment about leaked Slack messages related to payments to Russia and other sanctioned jurisdictions. Rippling denied sending the payments and conducted an internal review that showed D.S. had searched for the exact messages the reporter was asking about. 

Then came the honeypot operation. 

In a letter to Deel’s senior leadership, Wu insinuated that Rippling employees were discussing information that Deel would find embarrassing on a recently established Slack channel called “d-defectors.” The channel was a ruse and contained no discussions at all. 

The alleged spy “took the bait,” the complaint said. Hours after Rippling sent the letter, D.S. searched for and accessed the empty Slack channel. Rippling said this was the “smoking gun” that proved the highest echelons at Deel were orchestrating the espionage operation.

“We don’t turn to the legal system lightly,” Conrad wrote Monday on X. “But we are taking this extraordinary step to send a clear message that this type of misconduct has no place in our industry.”

This story has been updated to include comment from Deel on the lawsuit.