Curious tale of two HR tech unicorns, alleged espionage, and claims of a spy hiding in a bathroom

There's nothing bog-standard about this bombshell loo-suit

Updated Rival HR technology unicorns are at each other's throats in a courtroom brawl over alleged corporate espionage.

The People Center, also known as Rippling, on Monday sued rival workforce management firm Deel for alleged theft of trade secrets and corporate espionage.

Both companies are Delaware corporations operating out of San Francisco, California. Deel offers SaaSy global payroll services; Rippling offers a competing service among a broader suite of HR apps. Each startup is valued at $12-14 billion, making them so-called unicorns.

Rippling's federal-level lawsuit [PDF], brought in the US West Coast city, claims Deel recruited a Rippling employee - identified only as D.S. – as a spy to steal confidential information.

D.S., who lived in Ireland, joined Rippling in June 2023 as a global payroll compliance manager, and was given access to Rippling's internal HR systems, plus its Slack workspace, and Salesforce and Google Drive accounts, it is claimed.

In late 2024, D.S. allegedly started to scour Rippling’s Slack channels for info that could be useful to Deel. It is said he appeared to have been especially interested in info about Rippling’s sales pipeline.

"In total, Slack logs of D.S.'s activity establish that he secretly viewed and downloaded information from Rippling Slack channels dedicated to prospective clients over 1,300 times between November 2024 and March 2025," the complaint claims. "Rippling’s forensic investigation has uncovered several examples of how D.S. plundered these prospective customer Sales and Marketing Trade Secrets in a pattern demonstrating an intent to misappropriate them for Deel’s commercial benefit."

Cunning Slack honeypot

Rippling suspected it may have a spy in its midst and devised a cunning scheme to smoke them out.

That plan saw Rippling create a Slack channel called #d-defectors. The alleged spy was unaware of the channel’s existence and had never accessed it. Rippling’s next move was to send a letter to two Deel execs, and its external lawyers, claiming that the #d-defectors channel contained “information that Deel would find embarrassing if made public.”

The complaint claims that within hours of the letter being sent, “Deel’s spy searched for and accessed the #d-defectors channel.”

For Rippling, that’s proof that “Deel’s top leadership, or someone acting on their behalf, had fed the information on the #d-defectors channel to Deel’s spy inside Rippling.”

Convinced that Deel was behind the extensive internal document searches, Rippling obtained an order from the High Court in Ireland for the preservation of data on D.S.'s phone. On Friday, a court-appointed independent solicitor served that order.

According to the San Francisco filing this week, D.S. refused to comply with the Irish court order, putting himself at risk of arrest. He allegedly lied to the court-appointed solicitor about the location of his phone, and "then locked himself in a bathroom – seemingly in order to delete evidence from his phone – all while the independent solicitor repeatedly warned him not to delete materials from his device and that his non-compliance was breaching a court order with penal endorsement."

... locked himself in a bathroom – seemingly in order to delete evidence from his phone

The alleged spy responded to the solicitor's warning about breaching the court's order by saying, "I’m willing to take that risk" before fleeing the scene, the complaint states.

"We’re all for healthy competition, but we won’t tolerate when a competitor breaks the law,” said Vanessa Wu, general counsel of Rippling, in a statement Monday. "The scale of this corporate espionage is breathtaking – permeating their sales, marketing, recruiting and even communications operations."

Rippling did not respond to a request for further comment.

Deel fires back, calling it a distraction

Deel, unsurprisingly, has rejected Rippling's accusations and fired back with some of its own.

A spokesperson for Deel dismissed the lawsuit, framing it as a distraction: "Weeks after Rippling is accused of violating sanctions law in Russia and seeding falsehoods about Deel, Rippling is trying to shift the narrative with these sensationalized claims," the spokesperson told The Register. "We deny all legal wrongdoing and look forward to asserting our counterclaims."

Asked about whether Deel is accusing Rippling of sanctions violations, a Deel spokesperson said: "We don’t allege that, it was reported in this story."

However, Deel itself also has been accused of violating sanctions against Russia, according to a lawsuit [PDF] filed in Florida earlier this year by court-appointed receiver Melanie Damian. The complaint alleges that Deel processed payments on behalf of former client Surge Capital Ventures in violation of sanctions.

Surge has been sued separately by the US government's Securities and Exchange Commission over an alleged Ponzi scheme that defrauded church members. Damian has been appointed by the court to recover Surge's funds, some of which Deel is alleged to have transmitted - hence her complaint against Deel.

In its motion to dismiss [PDF] the Florida lawsuit, Deel claims the complaint "is the latest in a coordinated effort by a major investor in Deel’s primary competitor seeking to tarnish Deel’s stellar reputation."

The outfit did not immediately respond to a request to confirm, as has been reported, that Rippling is the competitor accused of trying to trash Deel’s reputation. ®

Updated to add

In a statement received after this story was filed, a Rippling spokesperson further clarified, "Rippling has never been accused of violating sanctions laws."