In a dramatic turn of events, HR tech giants Rippling and Deel are now locked in a fierce legal battle. Rippling has filed a lawsuit accusing Deel of corporate espionage, racketeering, misappropriation of trade secrets, and unfair competition. At the center of the case is a former employee whom Rippling claims acted as a spy for Deel — with Slack activity playing a starring role in exposing the alleged scheme.
Deel Fires Back, Denying All Allegations
Responding swiftly, Deel rejected all the allegations. In a statement to The Business Hill, a spokesperson called Rippling’s lawsuit a “sensationalized narrative,” accusing the company of deflecting attention from its own alleged issues.
“After facing accusations of violating sanctions in Russia and spreading false claims about Deel, Rippling is attempting to change the narrative with this lawsuit,” Deel said. “We categorically deny any legal wrongdoing and are preparing to pursue our own counterclaims.”
The Explosive Rivalry Heating Up the HR Tech Space
The global HR technology market is fiercely competitive. Industry giants like SAP, ADP, and Workday dominate, while startups like Rippling and Deel aim to disrupt the space by offering all-in-one platforms for payroll, onboarding, recruitment, and benefits management.
Both Rippling and Deel experienced massive growth during the pandemic-fueled remote work boom. But with economic pressures mounting, the competition between these two billion-dollar startups has intensified. Rippling currently boasts a valuation exceeding $13 billion, while Deel is hot on its heels at over $12 billion.
The rivalry turned public last year when Rippling launched a bold marketing campaign — a “Snake Game” — directly targeting Deel. The interactive game, which is still live, portrays Deel as a snake, accusing it of charging customers higher fees. Tensions escalated further when a Deel sales director interacted with Rippling’s chatbot on the site, an exchange that Rippling’s COO later posted on Twitter, drawing backlash from users accusing Rippling of doxxing.
Russian Sanctions Allegations Add Fuel to the Fire
Rippling’s legal complaint also hints at lingering accusations surrounding compliance with Russian sanctions — an issue that has previously dogged both companies. While the lawsuit references these allegations, details remain scarce, though it highlights how deeply the two rivals are entangled in controversy.
One of the most jaw-dropping revelations from the lawsuit is how Rippling allegedly caught the suspected “spy” — referred to as D.S. — red-handed, thanks to Slack’s internal activity logs.
According to Rippling, Slack automatically records user interactions, from document views and channel previews to searches. In November 2024, Rippling noticed an abnormal spike in D.S.’s Slack activity, especially around content involving Deel.
The complaint claims D.S. accessed confidential Slack channels hundreds of times, focusing on Rippling’s sales strategies, customer retention plans, and competitive intelligence — all unrelated to his official payroll operations role.
Rippling alleges that D.S. viewed channels with sensitive sales data over 450 times, specifically seeking out information related to Deel. The lawsuit also claims D.S. downloaded documents and attempted to help Deel poach Rippling’s staff.
Rippling Sets a Trap — And It Worked
Determined to catch D.S. in the act, Rippling created a fake Slack channel designed as bait. The company then fed information about this “honeypot” channel — supposedly containing embarrassing details about Deel — to Deel’s top executives, including its CFO and legal team.
Soon after, D.S. searched for the channel, allegedly confirming Rippling’s suspicions.
A Shocking Showdown — Employee Allegedly Tries to Destroy Evidence
The legal drama hit a fever pitch when an independent solicitor, backed by a court order, tried to seize D.S.’s phone. According to the complaint, D.S. locked himself in a bathroom, ignored multiple warnings, and was heard “doing something” with the phone. Moments later, a toilet flushed — suggesting D.S. might have attempted to destroy the device.
When confronted, D.S. allegedly responded, “I’m willing to take that risk,” before storming out of the office and disappearing.
Rippling did not confirm if further legal action would be taken directly against D.S., but the company’s lawsuit leaves little doubt about his identity. Despite only referring to him by initials, detailed job descriptions and timelines made it easy to trace him — his LinkedIn profile has since vanished.
What’s Next in This HR Tech Feud?
With billion-dollar valuations and global ambitions, both Rippling and Deel have a lot at stake. This case could reshape their rivalry and set new precedents around data security and internal espionage in tech startups.
For now, all eyes are on the courtroom as Rippling and Deel prepare for a brutal legal showdown — with Slack logs taking center stage.
