Rippling sues Deel over spying

If you have a few minutes, reading the full complaint is worth it - the blog posts and the articles don&#x27;t really do the whole story justice.<p>There is extremely damning evidence that this unnamed individual (&quot;D.S.&quot;) in Ireland was acting at the behest of Deel senior leadership, including:<p>- the COO of deel reached out to a rippling payroll manager on linkedin to recruit them. The rippling employee didn&#x27;t respond. Shortly thereafter, D.S. pulled up that employees personnel record in the HR system that has their unlisted phone number. Shortly after THAT, the COO of deel reached back out to that employee via WhatsApp and that phone number.<p>- The information was about to publish a story about Deel potentially violating sanctions. New information in the article was that at least one of the customers involved was a company called &quot;tinybird&quot;. No one at rippling was aware that this company even existed, but a week BEFORE the article came out, but after the reporter had been asking questions of Deel, D.S. started searching Slack for &quot;tinybird&quot; (and there were no other searches of &quot;tinybird&quot; across the whole company)<p>- Around the same time, the reporter for the information reached out to rippling and had internal Rippling slack messages about potential similar sanctions violations. A short time before that happened, D.S. was suddenly searching for &quot;russia&quot;, &quot;sanctions&quot;, &quot;iran&quot;, etc.<p>- There was an email between D.S. and the ceo of Deel, along with an introduction to someone from the family VC fund.<p>- And then, of course, the honeypot - a fake channel, fake chats from the Rippling CRO, but the chats had real stories that former Deel employees had alleged. Email sent to only the CEO of Deel, his dad&#x2F;chairman of the board, and their GC. Just a short time later, D.S. was searching for the fake channel, trying to find it, adn trying to find these chat messages.<p>I&#x27;m sure the CEO will try to have plausible deniability, that it was someone else in his org that he delegated investigating these things to, he had no idea, etc. But if they can get D.S. to crack and share the details of what happened, I think it will be tough to toe that line.

I have never heard of either company before and I&#x27;m starting to wonder whether I&#x27;m the odd one out. For those as lost as me, a cursory look tells me that Rippling is a &quot;Workforce management system (HR, IT, Finance)&quot; while Deel is a &quot;Payroll, Compliance and HR Solution&quot;.

The best part about this story is the spy, when asked to hand over his phone, decided to hide in the bathroom and lock himself in before storming out of the building refusing to hand it over.<p>&gt; On March 12, Rippling sought and obtained an order from Ireland’s High Court to seize the alleged spy’s phone. When served, the purported spy feigned compliance before “hiding in the bathroom and then fleeing the scene,” the complaint says.

The VCs in DEEL (per Crunchbase):<p>Y Combinator Andreessen Horowitz SV Angel General Catalyst Spark Capital Soma Capital Coatue Quiet Capital AltaIR Capital Elad Gil Franklin Templeton Alexis Ohanian Four Cities Capital Emerson Collective Justin Mateen Lachy Groom Neo Altimeter Capital Mubadala La Famiglia Nat Friedman Sinai Capital Partners Firebolt Ventures Y Combinator Continuity Fund Daniel Gross BAM Elevate Avichal Garg Incisive Ventures Ryan Petersen Darian Shirazi Counterpart Advisors Worklife Weekend Fund Recursive Ventures William Hockey Green Bay Ventures Esas Ventures Jeffrey Wilke Roosh Ventures Cem Garih Fresh Ventures Dara Khosrowshahi Nick Raushenbush Jeffrey Katzenberg Bouaziz &amp; Partners Alexandre Scialom Ben Lang Vinay Hiremath Rex Salisbury Terrance McArthur Pierre Bi John Zimmer Anthony Schiller Talal Chedid Raed Malek

This is the logical conclusion of companies with undifferentiated crapware products that compete using aggressive sales teams.<p>Sales driven companies are all corrupt and corrupting. This kind of espionage is common, as is outright bribery of buyers.

Rippling blog post: <a href="https:&#x2F;&#x2F;www.rippling.com&#x2F;blog&#x2F;lawsuit-alleges-12-billion-unicorn-deel-cultivated-spy-orchestrated-long-running-trade-secret-theft-corporate-espionage-against-competitor" rel="nofollow">https:&#x2F;&#x2F;www.rippling.com&#x2F;blog&#x2F;lawsuit-alleges-12-billion-uni...</a>

Remember that Israeli companies, including Deel, are mostly founded by members of Unit 8200 who are literal spies. These folks have their formative technical experience being spying on Palestinians in order to keep the occupation going.<p>Simple rule of thumb is never trust an Israeli company with your data or your customers&#x27; data.

Deel is the worst. I had to use them to be paid as a contractor. This was ok for about two years. Then Deel decided it wanted to force everyone to be paid using their Deel Wallet, a stored balance visa card. The terms and conditions of the Deel Wallet would force arbitration, allowed arbitrary changes to deposit and withdrawal terms and came with a $1000 penalty of one should choose to file a legal claim against Deel Wallet..

As the old saying goes … “The fact that you are paranoid doesn’t mean they are not out there to get you”

We had about 75 people hired through deel at one point. I actually complained to them because they were reaching out to my people inviting them to &quot;Deel Events&quot; and sending them marketing emails.<p>Deel is just another tech company that thinks they&#x27;re entitled to data, you&#x27;re just a user to them. I hope Rippling wins, and that management team gets put in their place.<p>In the mean time, I&#x27;m back to setting up local entities. They took a great idea and ruined trust. When I called them on it they just gave me corporate gaslighting.

Off topic but since we&#x27;re talking about deel: how terrible is it to deal with deel?<p>I&#x27;ve been on employer side of things and it seems like any exceptions to the rigid workflow breaks the entire process. Customer service is completely helpless in solving your problems. Bugs in the UI persist for years. Random emails asking you to complete tasks for long offboarded contractors.<p>What a load of junk.

I am curious how they got suspicious of a potential spy in the first place.

Honestly insane if this ends up being true. Companies <i>of course</i> do research on their competitors, often leaning on employees who have left, current customers, investors, etc. But how [if true] Deel RECRUITED A SPY is so far beyond what anyone in 2025 should deem normal.

for anyone wanting the Matt Levine delivery on this, it was in his Newsletter yesterday under &quot;Spies in the Sales Slack&quot;

I love how Cyberpunk is becoming real.<p>Black ICE, netrunners and rogue AIs will soon be added to the mix.<p>Off to re-read Neuromancer, so far ahead of its time.

Interestingly both are YC companies. Maybe YC can sort it out for them!

@dang is this story getting flagged? It&#x27;s appeared under various links in the last 24hrs and does not appear to have ever hit the front page despite a bunch of upvotes. This story seems relevant to HN, and given the policy of careful moderation of stories related to YC-companies perhaps it deserves a spot in the another-chance queue?

I still can&#x27;t understand how YC funds competing companies. Where is the efficiency in that? You have your portfolio companies wasting time with (alleged) spies and lawsuits.<p>They say they just admit smart people. So 3 friends from MIT get in to YC, and at the first office hours said friends tell the YC partners they are working on a startup that starts startups. Awkward.

Isn&#x27;t this like the third lawsuit Rippling has put up against Deel. There was one for some church thing end of last year, and they made a big stink in 2023 when regulations on prop trading shops changed.<p>If the allegations are true, it&#x27;s insane. But also feels a bit boy cried wolf.