A high-stakes corporate battle has unfolded in San Francisco, with two major HR software companies Rippling and Deel at the center of a dramatic espionage case.
Corporate Spy Caught in Honeypot Trap
Rippling, a firm known for automating payroll and compliance, has accused its competitor, Deel, of corporate spying. In a lawsuit filed in federal court, Rippling claims that Deel planted a spy, identified as D.S., within its ranks to steal sensitive company information.
The alleged espionage operation came to light after Rippling set up a trap known as a “honeypot” to lure the suspected mole into revealing himself. The trick worked, exposing D.S.’s activities within the company’s internal communication channels. According to the lawsuit, the suspected spy had been systematically searching for mentions of Deel in Rippling’s Slack workspace, averaging 23 searches per day over four months. This extensive activity raised suspicions, leading to the internal investigation that uncovered the scheme.
The legal complaint details how D.S. accessed critical company data, including sales strategies, pricing details, and internal discussions about competition with Deel. This information, Rippling alleges, was being funneled to Deel to give the rival firm an unfair advantage in the competitive HR technology market. The situation escalated when Rippling found that Deel had attempted to hire 17 of its employees using WhatsApp, a platform requiring access to private phone numbers. The company suspected this was another effort to extract valuable business intelligence.
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Dramatic Escape and Destruction of Evidence
When confronted with a court order to hand over his phone for investigation, D.S. took extreme measures to avoid compliance. According to legal documents, the employee locked himself inside a bathroom stall in Rippling’s Dublin office. While inside, an independent legal observer reportedly heard suspicious noises, including the sound of a toilet flushing. Investigators believe that D.S. may have attempted to destroy his phone to erase any evidence of his activities.
Despite repeated warnings that failure to comply with the court order could lead to jail time, D.S. allegedly responded, “I’m willing to take that risk,” before storming out of the office and fleeing the scene. Efforts to locate the device were unsuccessful, and no phone was recovered from the building’s plumbing system.
Rippling’s lawsuit suggests that Deel had been orchestrating this operation for months. The firm pointed to several instances where sensitive information appeared to have been leaked, particularly in connection with allegations of illegal transactions with Russian entities. A journalist had previously inquired about internal Slack messages related to payments in sanctioned regions, raising further concerns. Rippling later discovered that D.S. had specifically searched for the messages that were leaked to the press.
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To confirm their suspicions, Rippling set up a final test—the honeypot trap. The company created a fake Slack channel titled “d-defectors,” designed to attract the alleged spy’s interest. This channel contained no real discussions, but shortly after Rippling informed Deel’s leadership about the supposed content, D.S. accessed the channel. This, Rippling claims, was the definitive proof that Deel was behind the espionage scheme.
Legal Battle Between Bitter Rivals
Rippling and Deel have been fierce competitors in the HR technology space, both valued at over $12 billion. The two firms, located just minutes apart in San Francisco, have a history of hostility. Rippling’s CEO previously banned former employees who joined Deel from participating in company stock sales, indicating the depth of the rivalry.
Deel has strongly denied the allegations, dismissing the lawsuit as an attempt by Rippling to divert attention from its own legal troubles. Deel’s statement accused Rippling of trying to “shift the narrative” after facing accusations of violating sanctions laws related to business dealings in Russia. Rippling has rejected these claims, stating that its lawsuit is purely about protecting fair competition.
The case has added another layer of intrigue to Silicon Valley’s already intense corporate battles. With accusations of spying, a dramatic escape, and allegations of data theft, the lawsuit has all the elements of a high-stakes thriller. As the legal fight continues, the tech industry watches closely to see how this unprecedented case unfolds.
