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Rippling, an H.R. start-up led by the entrepreneur Parker Conrad, is accusing a top rival, Deel, of placing a mole within its ranks to steal confidential information. Credit...Kimberly White/Getty Images for TechCrunch

Spy accusations inflame an H.R. rivalry

One of the most bitter rivalries in the world of H.R. service providers just took a turn that wouldn’t be out of place in a spy thriller.

Rippling on Monday sued Deel, accusing its competitor of hiring a mole in its Dublin office to comb through Rippling’s trade secrets, a scheme that reached its rival’s highest ranks, DealBook’s Michael de la Merced reports. Rippling said it had uncovered the defector through a “honeypot” trap — a Slack channel set up specifically for the ruse that was mentioned in a letter to top Deel executives.

“We’re all for healthy competition, but we won’t tolerate when a competitor breaks the law,” Vanessa Wu, Rippling’s general counsel, said in a statement. A Deel spokeswoman said in a statement, “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. We deny all legal wrongdoing and look forward to asserting our counterclaims.”

The back story: Both companies have turned the seemingly humdrum business of human resources into multibillion-dollar operations. Rippling was most recently valued at $13.5 billion, according to the data provider Pitchbook, while Deel was valued at more than $12 billion. Aggressiveness also runs in their DNA, especially at Rippling, whose co-founder and C.E.O., Parker Conrad, is known for an especially hard-charging managerial style.

The two have clashed repeatedly in recent years, with Conrad barring former Rippling employees who decamped to Deel from participating in secondary stock sales. A Rippling investor is also tied to a lawsuit in Florida accusing Deel of violating Russia sanctions.

Rippling is now accusing Deel of perpetrating a “brazen act of corporate theft.” In the lawsuit, Rippling said that the employee it had accused of being a plant — referred to in the complaint as D.S. — started searching for mentions of Deel in its Slack messaging system at an elevated rate starting in November. The goal, Rippling asserted, was to find information relating to sales leads involving Deel customers, pitch decks and more.

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