Deel Countersues Rippling: Escalating HR Tech Rivalry

Deel Countersues Rippling in Escalating Dispute

A deepening conflict between competing HR and payroll service providers has led to Deel initiating a countersuit against Rippling.

This action follows Rippling’s initial lawsuit, publicly announced on March 17th, which accused Deel of corporate espionage. The original claims encompassed violations of the RICO act – typically reserved for prosecuting organized crime – alongside allegations of trade secret misappropriation and unfair competitive practices.

Deel is now characterizing Rippling’s lawsuit as a deliberate effort to damage its standing and reputation.

The startup is escalating the legal battle with its own filing. On Friday, Deel announced via a blog post the submission of a civil suit against Rippling in the Superior Court of Delaware.

Allegations Against Rippling’s CEO

Deel’s complaint, dated April 24th and examined by TechCrunch, presents a critical portrayal of Rippling CEO Parker Conrad. The document describes him as being “burdened by past setbacks and now motivated by envy due to his inability to effectively compete with Deel in the market.”

Furthermore, Deel alleges that Rippling was improperly handling its clients’ payroll tax and social benefit contributions. The company claims Rippling was “categorizing and reporting these funds as its own revenue.” It asserts that “Rippling not only diverts these funds from its clients, but also from its own workforce through a comparable tactic.”

Rippling’s Response and Key Arguments

Parker Conrad responded to the countersuit on X, stating that “Deel does not refute our primary claim – that @Bouazizalex directly recruited a spy to steal Rippling’s trade secrets and personally oversaw the theft.”

Deel has submitted three motions in response to Rippling’s initial lawsuit, including:

• A motion to dismiss based on forum non conveniens, advocating for the case to be heard in Ireland – where Rippling previously filed a lawsuit against Keith O’Brien, the alleged spy, and has now included Deel and several executives, including CEO Alex Bouaziz.
• A motion to dismiss under Rule 12(b)(6), citing “Rippling’s inability to establish a valid claim against Deel.”
• An anti-SLAPP motion – “to counter Rippling’s attempt to suppress Deel’s protected activities through legal action.”

Counter-Accusations of Information Solicitation

Within its complaint, Deel levels counter-accusations, alleging that Rippling actively sought confidential information from Deel employees “with the intention of passing it on to Rippling.”

The filing further contends that Rippling positioned an “insider within Deel, effectively enabling it to monitor Deel’s internal communications without authorization.”

Challenges in Serving Legal Papers

As of April 14th, Rippling was attempting to serve Alex Bouaziz with legal documentation. However, French bailiffs employed by Rippling were unable to locate Bouaziz.

On April 15th, TechCrunch reported that Deel’s CEO was in Dubai, complicating Rippling’s efforts. A Deel spokesperson clarified to TechCrunch on Friday: “Alex resides in Israel. He was in Dubai for a few days celebrating Passover with his family, a tradition he has observed for several years.”