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Rippling sues Deel over spying

Rippling sues Deel over spying

147 comments

·March 17, 2025

mattzito

If you have a few minutes, reading the full complaint is worth it - the blog posts and the articles don't really do the whole story justice.

There is extremely damning evidence that this unnamed individual ("D.S.") in Ireland was acting at the behest of Deel senior leadership, including:

- the COO of deel reached out to a rippling payroll manager on linkedin to recruit them. The rippling employee didn't respond. Shortly thereafter, D.S. pulled up that employees personnel record in the HR system that has their unlisted phone number. Shortly after THAT, the COO of deel reached back out to that employee via WhatsApp and that phone number.

- The information was about to publish a story about Deel potentially violating sanctions. New information in the article was that at least one of the customers involved was a company called "tinybird". No one at rippling was aware that this company even existed, but a week BEFORE the article came out, but after the reporter had been asking questions of Deel, D.S. started searching Slack for "tinybird" (and there were no other searches of "tinybird" across the whole company)

- Around the same time, the reporter for the information reached out to rippling and had internal Rippling slack messages about potential similar sanctions violations. A short time before that happened, D.S. was suddenly searching for "russia", "sanctions", "iran", etc.

- There was an email between D.S. and the ceo of Deel, along with an introduction to someone from the family VC fund.

- And then, of course, the honeypot - a fake channel, fake chats from the Rippling CRO, but the chats had real stories that former Deel employees had alleged. Email sent to only the CEO of Deel, his dad/chairman of the board, and their GC. Just a short time later, D.S. was searching for the fake channel, trying to find it, adn trying to find these chat messages.

I'm sure the CEO will try to have plausible deniability, that it was someone else in his org that he delegated investigating these things to, he had no idea, etc. But if they can get D.S. to crack and share the details of what happened, I think it will be tough to toe that line.

noisy_boy

The honeypot story seems so weird:

> So, to confirm Deel’s involvement, Rippling’s General Counsel sent a legal letter to Deel’s senior leadership identifying a recently established Slack channel called “d-defectors,” in which (the letter implied) Rippling employees were discussing information that Deel would find embarrassing if made public. In reality, the “d-defectors” channel was not used by Rippling employees and contained no discussions at all. ... Yet, just hours after Rippling sent the letter to Deel’s executives and counsel, Deel’s spy searched for and accessed the #d-defectors channel—proving beyond any doubt that Deel’s top leadership, or someone acting on their behalf, had fed the information on the #d-defectors channel to Deel’s spy inside Rippling.

I am sending legal letter to someone warning them that I have dirt on them AND am also mentioning where the dirt is. And that didn't ring any warning bells to Deel's management? Just wow, if true. If they are truly this incompetent, they have no business doing corporate espionage.

pea

This is hilariously similar to the ploy George Smiley gets Ricki Tarr to orchestrate from Paris in Tinker Tailor Soldier Spy

jamestimmins

It's a pretty classic canary trap/barium meal test, no? https://en.wikipedia.org/wiki/Canary_trap#Barium_meal_test

x0x0

They were already doing stuff that's squarely behavior for which the board will fire you (and plausibly criminal), so prudence already departed.

refurb

I don’t think the letter was “warning they have dirt on them”.

Presumably it was a letter on another topic say an accusation about Rippling poaching Deel’s employees.

Rippling’s legal counsel sends a letter back saying “we aren’t poaching, there are plenty of Deel employees are looking to leave based on posts to Twitter and Slack discussions such as those in the “d-defector” channel.”

noisy_boy

The "d-defactor" channel isn't a world-famous Slack channel - Deel didn't think twice about why this supposedly internal channel name was mentioned in the communication other than being a bait, while many other things were "redacted"?

jobs_throwaway

People who resort to corporate espionage do not have the most sound judgement

psd1

I think you mean "sound values".

I suspect that criminality is correlated with stupidity, but that doesn't make all criminals stupid.

E.g. scammers based in non-extradition territories may be making a savvy career choice, if we ignore matters of conscience.

I have insufficient information to assess the level of risk, but I believe corporate espionage has been successful in the past (hello cold war, hello China).

These particular people may have dropped a bollock, but that doesn't mean that crime cannot pay.

droopyEyelids

*People who are caught

noisy_boy

I thought being smart was the core competency of being in the spying business :)

makestuff

IMO this is going to create a wave of product offerings from security startups that "monitor for corporate espionage" similar to what Meta was doing tracking copy/paste into whats app, but do it across all apps. Like detect for seldom searched keywords, etc.

swyx

or lets calm down, this much espionage doesnt actually happen that much, and when it does, separating out people on need-to-know basis and introducing honeypots have been routine parts of the process for decades and costs nothing, no startup to be built here

"security startups that "monitor for corporate espionage"" imply introducing yet another third party that literally has access to all the things (or logs thereof) thereby introducing a nice fat pwn factor for everyone

makestuff

Oh I agree it is a bad idea, but that doesn't mean it will not happen.

rl1987

This sort of stuff already exists. The term is Data Loss Prevention.

kstrauser

Eh. DLP’s alright when the data is neatly identifiable. Like, a social security number has a well defined format. When you get into the abstract it’s less helpful.

groby_b

"create"?

The keyword you're looking for is "data loss prevention", it's a thriving market.

financetechbro

A flavor of these offerings already exist in the financial compliance world

calmoo

link to complaint: https://rippling2.imgix.net/Complaint.pdf

Really worth the full read.

LoganDark

> Really worth the full read.

Absolutely agree, although it's around an hour's read.

Into the void I say: There's a typo on page 39 (of the PDF; the bottom of the page says 37) line 1. That item should be item 4 since it comes after another item 3.

(page 12 also has "at which the Rippling would be offering those solutions" which should probably be just "Rippling", I suspect it said "the Rippling platform" before being corrected to "Rippling" but forgetting to remove "the")

anf0

Is it known how Rippling obtained information about D.S.' Slack activity? Does Slack provide this information or did Rippling obtain this information by running third party monitoring software on D.S.' machine?

eclipticplane

Slack has a ton of auditing controls built in to the enterprise version: https://api.slack.com/admins/audit-logs-call#channel

EdwardDiego

Don't see anything in there about searches?

heymijo

The complaint goes into a lot of detail. Start at page 16 and read through at least page 23 if you want to understand what Ripling could discern from the spy's Slack usage.

> In part to ensure that the confidential information in Rippling’s Slack channels is used only for authorized purposes, Rippling employees’ Slack activity is “logged,” meaning every time a user views a document through Slack, accesses a Slack channel, sends a message, or conducts searches on Slack, that activity (and the associated user) is recorded in a log file.

r00fus

Enterprise Slack - everything is audited, and searchable with appropriate permissions. Your slacks on company time or with company equipment are not private from said company.

darth_avocado

Enterprise Anything - everything is logged and searchable in any company that has an IT dept.

42lux

Both would be fine? It’s a corp machine. If you find the amount of data disturbing don’t look what MS365/Teams is tracking…

ivraatiems

Agree, the entire complaint is fascinating reading. I suspect Deel's responses will mostly be "we deny everything," but any counter-arguments they make will also be very interesting.

I have to say, I think if this was just limited to the Slack previewing behavior, it's unlikely it would have been caught. Previewing Slack channels is not particularly unusual or suspicious behavior and many people, probably most, don't even think of it as being something that'd be logged. (I personally didn't think of it until reading this post, but in retrospect, of course it is. Everything is.)

Crossing the line into dumb things like Deel executives personally contacting the spy's subordinates via their personal phone numbers, which he had no way of knowing is like sending up a massive flare of weirdness. I'm not saying loyalty to one's employer is everything, or even particularly important, but if I was randomly headhunted by a C-level from a direct competitor, who I had never spoken to or expressed interest in, I'd be pretty suspicious, and I'd find it underhanded. I might mention it to someone.

Supposing the allegations are substantially true, I wonder why Deel felt comfortable going that far. Maybe underestimation of competition?

frankfrank13

> I'm sure the CEO will try to have plausible deniability

I'm not so sure, this is very damning

duskwuff

It certainly is damning - but there's no upside to Deel in admitting to their actions, either.

probably_wrong

I have never heard of either company before and I'm starting to wonder whether I'm the odd one out. For those as lost as me, a cursory look tells me that Rippling is a "Workforce management system (HR, IT, Finance)" while Deel is a "Payroll, Compliance and HR Solution".

skerit

I use Deel to hire people internationally. It's mostly an EOR company. They promised a lot though, I once thought about moving my entire HR workflow to Deel (even for local employees), but quickly decided against it.

dablweb

Remote.com also compete in this space, and they have a pretty good UI and customer service.

Not cheap, but worth it for sure considering how much time they save you.

xtracto

As someone outside the US who has worked with several of those companies before. The best one for the employees was Globalization Partners. Of course they were the most expensive.

Deel is the opposite: they provide US companies with gray area (or you could even say illegal in some countries) trickstery to reduce cost of employing people.

scarface_74

Rippling is a PEO

https://www.rippling.com/peo

My company uses it. When you work for a company that uses Rippling, you are “co- employed” by both your company and Rippling. Your company does everything as far as hiring, firing, HR, management, etc.

But as far as taxes, insurance and benefits, you “work for” Rippling. It allows small companies to have the benefits of a larger company. Your company pays the PEO per head. It also serves as an SSO provider. Another startup I worked for in the past used Insperity.

paulgb

They have a PEO option, but FWIW they can also be used as a payroll provider / HR system (benefits access, vacation tracking, etc.) without a PEO.

scarface_74

That’s true. I got a “termination notice” from Rippling at the beginning of the year and had to fill out a W4 directly with my company. We are still using Rippling. But I assume not as a PEO anymore

mdip

The company my employer uses, as far as I can tell, handles all of HR functions -- compliance, training, tax/payroll, benefits and the like.

mdip

Thank you for the explanation. It's been something I've been meaning to research because I'd never encountered this before my current employer and it's become something I will actually ask about in the future.

I prefer smaller employers (500 or less) but this is pretty fantastic. I've worked for a Fortune 500 employer with a solid, expensive-but-generously-subsidized healthcare plan, a tiny employer with expensive coverage that wasn't all that great but I've never been able to select from three different providers with a few options a piece.

It was a "killer feature" for me. My family has low-to-moderate medical needs, I like HSA eligible PPOs if the deductible/cost is right. I was able to find three plans that were taken by my family's specific specialists where I could max out the HSA deduction and pay less than half what I had at the last "typical employer plan" company.

This came too late for the Dental side of things -- I would have saved a couple grand per child on braces by purchasing the "Cadillac Plan" even with the two-year lock-in. The last three employers all had plans that seemingly no dentist on Earth is "in network" for and from insurance brands I've never heard of.

There's other upsides -- working at BigCo, we received various discounts at specific car rental companies/hotel chains that the company negotiated discounted rates in exchange for preference for business travel.

I haven't looked into what my company is doing, fully, yet, but it sounds like we have a subset of some of those features, too. We're around 150-200 people (I think) but this is the most comprehensive and reasonably priced benefits offering I've ever seen.

justinc8687

I personally use Deel so that as a one-person company I can access large group benefits. Using their EOR saves me about $5000/year on health insurance compared to an ACA policy.

sroussey

I have used TriNet for similar purposes in the past.

jddj

Who covers the PI in these cases?

Edit: noticed you said insurances, is PI included?

scarface_74

What’s PI?

jeanlucas

I don't know Rippling, but Deel is widely adopted over here in Brazil for startups hiring international workers.

pkilgore

Be thankful you've never heard of Deel. It's the worst PEO I've ever used, by an extremely wide margin, having used 3 others.

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jacobsenscott

If you've never worked at a company that uses rippling or deel you wouldn't. They are niche HR tools, mostly targeting smaller companies.

csomar

If you don't hire (or are hired) internationally (across jurisdictions), then it makes sense if you have never heard of them.

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skizm

The best part about this story is the spy, when asked to hand over his phone, decided to hide in the bathroom and lock himself in before storming out of the building refusing to hand it over.

> On March 12, Rippling sought and obtained an order from Ireland’s High Court to seize the alleged spy’s phone. When served, the purported spy feigned compliance before “hiding in the bathroom and then fleeing the scene,” the complaint says.

jacobsenscott

This is gold, and hilarious. I get why someone would "spy" on rippling for money, but my god, don't use a phone. And why would you even need to be on prem to do this kind of spying? There are so many better ways.

The_Blade

Fontaines H.C.

PhillyPhuture

The VCs in DEEL (per Crunchbase):

Y Combinator Andreessen Horowitz SV Angel General Catalyst Spark Capital Soma Capital Coatue Quiet Capital AltaIR Capital Elad Gil Franklin Templeton Alexis Ohanian Four Cities Capital Emerson Collective Justin Mateen Lachy Groom Neo Altimeter Capital Mubadala La Famiglia Nat Friedman Sinai Capital Partners Firebolt Ventures Y Combinator Continuity Fund Daniel Gross BAM Elevate Avichal Garg Incisive Ventures Ryan Petersen Darian Shirazi Counterpart Advisors Worklife Weekend Fund Recursive Ventures William Hockey Green Bay Ventures Esas Ventures Jeffrey Wilke Roosh Ventures Cem Garih Fresh Ventures Dara Khosrowshahi Nick Raushenbush Jeffrey Katzenberg Bouaziz & Partners Alexandre Scialom Ben Lang Vinay Hiremath Rex Salisbury Terrance McArthur Pierre Bi John Zimmer Anthony Schiller Talal Chedid Raed Malek

groby_b

OK, but why is this relevant?

theoryofx

This is the logical conclusion of companies with undifferentiated crapware products that compete using aggressive sales teams.

Sales driven companies are all corrupt and corrupting. This kind of espionage is common, as is outright bribery of buyers.

gkoberger

I can't believe I'm about to defend a HR payroll systems.... but I wouldn't call Rippling or Deel "crapware". We use both; they're boring but necessary products, and they do their job well.

[Edit: Added Deel, since we use both! Also hello to the Rippling salesperson who is reading this and is about to reach out to me to convince us to switch.]

LoganDark

I think it's Deel that they're calling crapware, because they have to resort to such practices as these

gkoberger

We use Deel, too, and it's not "crap" either. It's boring but that's somewhat the point... how "differentiated" can a payroll system get?

(Also, it's hard to call Deel undifferentiated since they were first to market on this product.)

groby_b

If you have a reasonably competent sales team, you don't need "spying", you just ask the customers about their experience with the competitor.

Any reasonably company both shops around and is happy to throw one provider under any number of buses if it gets them a better deal with another provider.

The_Blade

never spy on your competition using your company email

hilarity ensues

gukov

NetOpWibby

Yikes! Good ol’ honeypot, works all the time.

pbiggar

Remember that Israeli companies, including Deel, are mostly founded by members of Unit 8200 who are literal spies. These folks have their formative technical experience being spying on Palestinians in order to keep the occupation going.

Simple rule of thumb is never trust an Israeli company with your data or your customers' data.

sorokod

Any specific reason you believe that Deel was founded by spies or is your statement based on some general principle?

01HNNWZ0MV43FF

Deel is not on the list here but a lot of companies are https://en.wikipedia.org/wiki/Unit_8200#Companies_founded_by...

sorokod

Indeed it isn't.

In general though, what would you expect from young people who spent years in high-tech heavy SIGINT unit to do?

Mistletoe

Why are you saying it is Israeli? The wiki says it is American?

https://en.wikipedia.org/wiki/Deel_Inc.

> How did Deel start? What’s your story? I'm originally from France. I lived in Israel, the U.K., the U.S., and Spain. Similarly, my co-founder, Shuo, was born and raised in Beijing. -Alex Bouaziz

pbiggar

From wikipedia: "Deel Inc. is an Israeli-American outsourcing and human resources company,[3] based in San Francisco, California"

Also, they're listed on https://www.israelitechalternatives.com/company/deel/

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nickphx

Deel is the worst. I had to use them to be paid as a contractor. This was ok for about two years. Then Deel decided it wanted to force everyone to be paid using their Deel Wallet, a stored balance visa card. The terms and conditions of the Deel Wallet would force arbitration, allowed arbitrary changes to deposit and withdrawal terms and came with a $1000 penalty of one should choose to file a legal claim against Deel Wallet..

ridruejo

As the old saying goes … “The fact that you are paranoid doesn’t mean they are not out there to get you”

fireburning

who says that? i have never heard the saying

maybe the they got to the paranoid and induced chest pains so they could never share their saying?

dustincoates

It's the Martha Mitchell Effect: https://en.wikipedia.org/wiki/Martha_Mitchell_effect

> Mitchell was the wife of John Mitchell, United States Attorney General in the Nixon administration. When she alleged that White House officials were engaged in illegal activities, her claims were attributed to mental illness. Ultimately, however, the facts of the Watergate scandal vindicated her and garnered her the label "The Cassandra of Watergate".

jeffdotdev

We had about 75 people hired through deel at one point. I actually complained to them because they were reaching out to my people inviting them to "Deel Events" and sending them marketing emails.

Deel is just another tech company that thinks they're entitled to data, you're just a user to them. I hope Rippling wins, and that management team gets put in their place.

In the mean time, I'm back to setting up local entities. They took a great idea and ruined trust. When I called them on it they just gave me corporate gaslighting.

pbiggar

We use Plane.com, as they are one of the few companies that support hiring in Palestine. Deel doesn't even list Palestine on their countries page, which tells you a lot about their ethics.

JustSkyfall

It’s nice to see folks in the YC community actually care about genocide for sure :)

akoculu

Incredible. So they're openly supporting genocide of Palestinians?

anonu

Off topic but since we're talking about deel: how terrible is it to deal with deel?

I've been on employer side of things and it seems like any exceptions to the rigid workflow breaks the entire process. Customer service is completely helpless in solving your problems. Bugs in the UI persist for years. Random emails asking you to complete tasks for long offboarded contractors.

What a load of junk.

warp

As a contractor being paid through deel, I don't have any issues, and it's much more convenient for me than what my employer used before. Useful features have been added over the past few years, though I don't like the most recent UI refresh.

I can have multiple accounts in different countries, and configure percentages to be paid out automatically to each of my bank accounts. European tranfers typically arrive almost instantly, to Ecuador typically arrive the next day, sometimes the same day. It's all fairly convenient.

ksynwa

I am curious how they got suspicious of a potential spy in the first place.

ToValueFunfetti

A journalist using private slack messages as a source reached out for comment on the story.

LoganDark

In the actual filing, it is shown that a journalist was in possession of screenshots of internal Rippling Slack messages, which is what prompted the investigation.