Deel Under DOJ Investigation Amidst Escalating Corporate Espionage Allegations
The corporate rivalry between HR and payroll startups Deel and Rippling has intensified, with the U.S. Department of Justice (DOJ) reportedly initiating a criminal investigation into Deel. This probe centers on allegations that Deel engaged in corporate espionage by hiring an insider to leak confidential information from its competitor, Rippling. ([techcrunch.com](https://techcrunch.com/2026/01/23/the-rippling-deel-corporate-spying-scandal-may-have-taken-another-wild-turn/?utm_source=openai))
In response to these reports, Deel stated, We are not aware of any investigation. We will always cooperate with the relevant authorities and provide any necessary information in response to valid inquiries. The company further accused Rippling of conducting a smear campaign, asserting that Deel is outperforming its competitor in the market and expressing confidence that the truth will win in court. Rippling has declined to comment on the matter. ([techcrunch.com](https://techcrunch.com/2026/01/23/the-rippling-deel-corporate-spying-scandal-may-have-taken-another-wild-turn/?utm_source=openai))
Background of the Dispute
The conflict between Deel and Rippling became public in May 2025 when Rippling filed a lawsuit accusing Deel of corporate espionage. The suit alleged that Deel had planted a spy within Rippling to access sensitive information, including sales leads, product roadmaps, and customer data. The individual in question, a Rippling employee, confessed in an Irish court to being a paid informant for Deel, providing detailed accounts of the information he supplied to Deel executives. ([techcrunch.com](https://techcrunch.com/2025/04/02/the-affidavit-of-a-rippling-employee-caught-spying-for-deel-reads-like-a-movie/?utm_source=openai))
Rippling’s lawsuit, which is ongoing, charges Deel with violations of the federal Racketeer Influenced and Corrupt Organizations (RICO) Act, typically used against organized crime, among other allegations. Despite the serious nature of these claims, the suit remains a civil case rather than a criminal prosecution. ([techcrunch.com](https://techcrunch.com/2025/06/05/rippling-calls-deel-a-criminal-syndicate-and-claims-4-other-competitors-were-spied-on-too/?utm_source=openai))
In retaliation, Deel filed a countersuit against Rippling, alleging that Rippling engaged in similar espionage tactics by impersonating a customer to gain unauthorized access to Deel’s systems. Deel’s complaint also accuses Rippling’s CEO, Parker Conrad, of orchestrating these actions out of jealousy and a desire to undermine Deel’s success. ([techcrunch.com](https://techcrunch.com/2025/04/25/deel-files-countersuit-against-rippling-as-rivalry-escalates/?utm_source=openai))
Developments in the Investigation
The DOJ’s reported investigation into Deel marks a significant escalation in this corporate feud. While Deel maintains that it is unaware of any such investigation, the potential for criminal charges adds a new dimension to the ongoing legal battles.
The individual who confessed to spying for Deel has agreed to testify in Rippling’s case. According to court documents, Rippling has agreed to cover his legal and travel expenses in exchange for his cooperation. Deel has criticized this arrangement, referring to the individual as Rippling’s paid witness. ([techcrunch.com](https://techcrunch.com/2026/01/23/the-rippling-deel-corporate-spying-scandal-may-have-taken-another-wild-turn/?utm_source=openai))
Further complicating the situation, the confessed spy has alleged that his family is living in fear due to surveillance by individuals he believes are associated with Deel. Initially, Deel’s legal representatives denied any involvement, but subsequent court testimony revealed that the company had indeed hired discreet surveillance of the individual. ([techcrunch.com](https://techcrunch.com/2025/08/19/deel-scores-a-lawsuit-win-but-not-against-rippling/?utm_source=openai))
Implications for the HR Tech Industry
The unfolding drama between Deel and Rippling has cast a spotlight on the competitive and often cutthroat nature of the HR tech industry. Both companies have experienced rapid growth and have attracted significant investment. For instance, in May 2025, Rippling raised $450 million at a valuation of $16.8 billion, signaling strong investor confidence despite the ongoing legal disputes. ([techcrunch.com](https://techcrunch.com/2025/05/09/rippling-raises-450m-at-a-16-8b-valuation-reveals-yc-is-a-customer/?utm_source=openai))
The allegations of corporate espionage and the subsequent legal battles raise questions about ethical practices within the industry. If the DOJ’s investigation leads to criminal charges against Deel, it could have far-reaching consequences for the company and potentially set a precedent for how similar cases are handled in the future.
Looking Ahead
As the legal proceedings continue, both Deel and Rippling face challenges in maintaining their reputations and customer trust. The outcome of the DOJ’s investigation and the ongoing lawsuits will likely have significant implications for both companies and the broader HR tech sector.
In the meantime, industry observers and stakeholders will be closely monitoring developments, as the case serves as a stark reminder of the high stakes involved in corporate competition and the importance of adhering to ethical business practices.
