The ongoing drama between HR and payroll startups Deel and Rippling has taken a dark turn, with the Department of Justice reportedly opening a criminal investigation into Deel over allegations of corporate espionage. According to a report by The Wall Street Journal, Deel is accused of hiring a corporate spy to leak sensitive information about its competitor, Rippling.
In response to these allegations, Deel has denied any knowledge of an investigation and stated that they will cooperate with authorities if necessary. However, the company has also made counter-allegations against Rippling, claiming that their rival has been engaging in a smear campaign to tarnish Deel’s reputation in the market.
The feud between the two startups escalated when Rippling filed a lawsuit against Deel, accusing them of planting a corporate spy within their organization. The alleged spy confessed to passing on confidential information to Deel executives, including sales leads, product roadmaps, and customer account details. Rippling’s lawsuit, which includes allegations of federal racketeering violations, is still ongoing.
In a surprising twist, Deel countersued Rippling, claiming that they too were victims of spying tactics, including impersonating a customer. The legal battle between the two companies has attracted attention for its high-stakes allegations and courtroom drama.
One of the key figures in the case, the confessed spy, has been living in fear after alleging that he was being followed by individuals associated with Deel. Bank records obtained by Rippling also revealed suspicious transactions involving Deel’s COO and the confessed spy, further implicating Deel in the espionage scandal.
Both companies have enlisted top-tier legal representation for the case, with Deel’s CEO hiring a prominent white-collar defense lawyer and Rippling being represented by a former prosecutor known for his celebrity clients. The legal battle between the two startups has drawn comparisons to a plot from a John Grisham novel, with high-profile lawyers and multimillion-dollar valuations on the line.
Despite the legal turmoil, investors have continued to support both Deel and Rippling, with both companies achieving multibillion-dollar valuations through recent funding rounds. The outcome of the criminal investigation and ongoing lawsuits will likely have significant implications for the future of these two HR startups in the competitive Silicon Valley landscape.
