A US federal judge dealt fresh setbacks to Deel in the Rippling case over alleged spying, including rejecting its bid to strike testimony from a central witness
Context & Ripple Effects
Rippling’s March 2025 suit alleged that Deel placed a mole in its Dublin office, while Deel answered with an April 2025 defamation and deceptive-trade-practices case and later alleged that a Rippling employee posed as a customer to obtain its information. The dispute has therefore developed into reciprocal litigation over alleged competitive-intelligence tactics, not a one-sided commercial fight. The evidentiary ruling arrives after January 2026 reports that the DOJ had opened a criminal probe and issued grand-jury subpoenas over allegations concerning a purported spy inside Rippling; those reports were based on sources and do not establish the allegations. Keeping a central witness’s testimony in the civil record raises the practical stakes of a case already centered on how each company obtained rival information.
First-order effects
- Deel cannot remove the central witness’s testimony through its rejected motion, leaving Rippling able to rely on that evidence as the civil case proceeds.
- The ruling strengthens Rippling’s near-term litigation position while forcing Deel to contest the witness’s account on the merits rather than excluding it outright.
Second-order effects
- The companies’ competing claims over alleged information-gathering practices are likely to keep discovery, employee conduct, and customer-access controls at the center of their legal strategies.
- The reported DOJ inquiry gives both parties added incentive to treat the civil record carefully, although the reported allegations have not been established.
Third-order effects
- If rival HR-software vendors increasingly pursue disputes over employees, customer access, and internal data through court, competitive intelligence becomes an IP-and-litigation governance issue rather than solely a sales function.
- The case illustrates the shift from talent disputes to alleged trade-secret misconduct, where evidence preservation and internal access controls can shape competition between closely matched platforms.
The trend: Competition between enterprise-software rivals is increasingly being contested through trade-secret, employee-access, and competitive-intelligence litigation.