In the latest development of an increasingly public dispute between HR and payroll services rivals, Deel has filed a countersuit against Rippling.

To recap: Rippling publicly announced on March 17 that it was suing Deel over alleged corporate espionage, with accusations ranging from violation of the RICO racketeering act (typically used to prosecute organized crime) to misappropriation of trade secrets and unfair competition. Deel is now slamming that lawsuit as part of a “campaign to try to impugn Deel’s reputation.”

That original lawsuit included an affidavit from the alleged spy that reads like a movie script. Deel had previously denied all wrongdoing.

Now the startup is taking things a step further. In a blog post Friday, Deel announced it has filed a civil suit against Rippling in the Superior Court in Delaware.

Deel’s complaint, dated April 24 and reviewed by TechCrunch, paints an unflattering picture of Rippling CEO Parker Conrad, describing the executive as “haunted by his previous failures, and now fueled by suffocating jealousy at his inability to fairly compete with Deel in the marketplace.”

Deel also alleged that Rippling was not remitting its customers’ payroll tax and social benefits dollars to local taxation authorities, but rather “categorizing and reporting these funds as its own earnings.” It went on to claim that “not only does Rippling steal these funds from its clients, but also from its own employees by using a similar scheme.”

In response, Conrad took to X to post that, “Nowhere does Deel dispute our central allegation – that @Bouazizalex personally recruited a spy to steal rippling’s trade secrets, and personally directed the theft.”

Specifically, Deel filed three motions addressing Rippling’s March lawsuit, including:

• A motion to dismiss on forum non conveniens grounds in favor of Ireland — arguing the case should be resolved where “Rippling previously initiated litigation” against Keith O’Brien, the alleged spy, and has now named Deel and several executives, including CEO and co-founder Alex Bouaziz.
• A motion to dismiss under Rule 12(b)(6) — citing “Rippling’s failure to state a viable claim against Deel.”
• An anti-SLAPP motion — ”to stem Rippling’s attempt, through litigation, to infringe on Deel’s protected conduct.”

In its complaint, Deel makes counter-accusations, alleging that Rippling solicited Deel employees “to pass on to Rippling confidential commercially sensitive information about Deel.” The filing further accuses Rippling of placing its own “insider at Deel, essentially allowing it to eavesdrop on Deel’s internal communications without Deel’s permission.” 

As of April 14, Rippling was attempting to serve Alex Bouaziz with legal papers. However, French bailiffs hired by Rippling couldn’t seem to find Bouaziz. On April 15, TechCrunch reported that Deel’s CEO was in Dubai, further complicating Ripple’s efforts to serve him. A Deel spokesperson told TechCrunch on Friday: “Alex lives in Israel. He was in Dubai for a few days for Passover with his family, something he’s done for the past several years.”

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