Rippling v. Deel Explained
Rippling sued their arch-competitor Deel in the Northern District Court of California on March 17, 2025. There were seven causes of action alleged, including misappropriation of trade secrets (both under federal DTSA and California state UTSA) and Racketeer Influenced and Corrupt Organizations Act (“RICO”). Rippling claims that Deel used a “spy” or “mole” within Rippling to obtain valuable confidential information from within Rippling. The spy was hired into a management role and was given access to many trade secrets. This corporate espionage lasted over four months, and included information about pricing, sales leads, sales pipeline, and Rippling’s playbook for pitching clients. The information was sent back to Deel’s senior leadership. The spy also used confidential HR records to contact Rippling employees and to try to encourage them to change employment to Deel. Rippling’s IT security team even used a test known as a “honeypot” in security circles to find evidence and trap people acting inappropriately. The federal court complaint contains a lot of detailed information about Rippling’s types of trade secrets. It also mentions that all Rippling’s employees sign and confidentiality & IP assignment agreement, employee handbook, and code of conduct. They also use access restrictions on their IT systems. These policies and procedures will be useful when arguing about whether “reasonable measures” were taken to protect Rippling’s trade secrets. This lawsuit was just filed and will be interesting to watch this year, with plenty of drama and intrigue behind the story. This case already shows the high value of business trade secrets, and how HR plays an important role in addressing trade secret risk as part of the onboarding process. Deel has yet to file their answer but are expected to deny the allegations. Disclosure: Tangibly has used both Deel and Rippling for their payroll services, but we have not yet helped either one manage their trade secrets and lower their risk.How to Start Protecting Your Trade Secrets
Lessons from Rippling v. Deel The Rippling v. Deel lawsuit offers a clear example of how corporate espionage and insider threats can damage even the most sophisticated organizations. If a competitor can gain access to your pricing model, customer lists, or sales playbook, your business is at serious risk. Here’s how to build your defense:Protecting Trade Secrets
- Identify Critical Business Information: Define what qualifies as a trade secret, customer lists, sales pipeline, product strategies, and treat them like high-value assets.
- Limit Exposure: Use access controls, track digital behavior, and ensure only trusted employees have visibility into sensitive data.
- Build Legal Defenses: Use confidentiality agreements, IP assignment clauses, and documented policies to prove you’ve taken “reasonable measures” to protect your assets.
HR’s Role in Preventing Insider Threats
- Strengthen Hiring Practices: Review employment history and conduct background checks to identify red flags early and reduce the risk of insider threats.
- Embed Security in Onboarding: Make trade secret protection a foundational part of employee orientation and training.
- Monitor and Respond: Be proactive in identifying subtle signs of corporate espionage, including unusual access to sensitive data or irregular communication with competitors.
