Indian-origin engineer’s US startup Rippling sues ‘unicorn’ for planting spy: ‘Locked himself in bathroom’

Workforce management software maker Rippling has sued its competitor Deel for planting a spy and attempting to steal trade secrets, according to a lawsuit shared on its blog page. The US-based startup, co-founded by Indian-origin engineer Prasanna Sankar and American entrepreneur Parker Conrad, said the $12-billion unicorn implemented a months-long campaign to steal its confidential information with the help of a “corporate spy”.

According to a lawsuit filed on Monday, March 17, in the Northern District of California, San Francisco Division, Deel cultivated a Rippling employee to perform thousands of suspicious searches and funnel stolen confidential business intelligence back to Deel. The company alleged that Deel’s top management was also a part of the espionage.

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What did Deel’s spy steal?

The lawsuit alleged that Deel’s agent spied on Deel’s own customers who were exploring to shift to Rippling. On average, he searched the term ‘Deel’ in Rippling’s systems 23 times each day over a span of four months.

He used the information he gathered to spy on every detail of Rippling’s sales pipeline in competing with Deel.

The information he stole included proposed pricing, details of sales meetings and conversations between Rippling and prospective customers evaluating a switch away from Deel, and training materials for Rippling’s sales organisation on how to compete against Deel.

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How did Rippling catch the spy?

Rippling crafted a letter which talked of an empty channel in Rippling’s Slack system called “d-defectors”. The company implied in the latter that the Slack channel contained messages that would be of interest to Deel.

The letter was sent to only three people – Phillipe Bouaziz, the chairman of Deel’s board, CFO, General Counsel, and the father of Deel CEO Alex Bouaziz; Spiros Komis, Deel’s Head of US Legal; and the company’s outside counsel at law firm.

Hours after the letter was sent, the spy was seen searching for the empty and never-before-used Slack channel on Rippling’s system. This proved that Deel’s top leadership was part of the espionage.

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‘Spy locked himself in bathroom’

The lawsuit detailed that the spy was confronted at Rippling’s Dublin office last Friday with a court order. The order directed the spy to hand over his phone, seeing which he fled to the bathroom and locked the door.

The spy was repeatedly warned not to delete information from his mobile phone and that doing so could lead to jail time. The spy responded saying, “I am willing to take that risk,” before fleeing the premises.

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What did Deel do with stolen info?

Deel’s spy searched Rippling’s Slack over 6,000 times and operated for over four months while “obsessively and systematically accessing Slack channels where he had no legitimate business interest”, Rippling’s lawsuit alleged.

According to the lawsuit, using the stolen information, Deep allegedly obtained an unfair and illegal advantage to:

• Intercept and counter Rippling’s sales efforts by learning which customers Rippling was pitching in real time.
• Preemptively retain customers who were considering switching from Deel to Rippling.
• Poach Rippling employees by using stolen contact details, including private phone numbers, to aggressively recruit them – sometimes making offers without even interviewing the candidate.
• Distort media narratives by misusing confidential Rippling information to counter negative press about Deel’s own misconduct.

Rippling is seeking compensatory and punitive damages for the harm Deel has inflicted and will pursue all necessary legal action to ensure accountability, the company announced.