Deel asked a federal judge on July 14 to strike testimony from Keith O'Brien, the former Rippling employee at the center of a corporate espionage lawsuit between the two payroll and employer-of-record companies, according to Bloomberg (Bloomberg, 2026). Deel's filing argues O'Brien has effectively refused to testify after declining to answer more than 100 of Deel's questions, invoking his Fifth Amendment right against self-incrimination (Bloomberg, 2026; Staffing Industry Analysts, 2026).
The case is proceeding in the U.S. District Court for the Northern District of California. Rippling first sued Deel in March 2025, alleging Deel paid O'Brien to search Rippling's internal Slack channels and pass confidential business information to Deel executives (Nearshore Americas, 2026; TechCrunch, 2026). Rippling amended its complaint in June 2025 to add civil RICO claims and named Deel co-founder and CEO Alex Bouaziz as an architect of the alleged scheme (TechCrunch, 2026).
What the filings show
Unsealed court records reported by CTech in 2026 show funds moving from a Deel corporate account through a personal bank account belonging to the wife of Deel Chief Operating Officer Dan Westgarth, then to O'Brien within roughly a minute, according to the banking records described in the filings (CTech, 2026). Deel has said in court filings that the payment covered living expenses, while Rippling has characterized it as evidence of a coordinated insider operation (CTech, 2026).
The dispute has also drawn a criminal inquiry. The U.S. Attorney's Office for the Northern District of California has issued grand jury subpoenas as part of a Department of Justice investigation into the allegations, according to reporting from PYMNTS and CTech (PYMNTS, 2026; CTech, 2026). No charges have been filed against Deel, its executives, or O'Brien as of this writing. The allegations against Deel remain unproven claims in active civil litigation and a preliminary criminal inquiry, not findings of a court.
Deel has separately countersued in Delaware Superior Court, alleging a Rippling employee posed as an executive of a fictitious company to gain access to Deel's customer platform (Nearshore Americas, 2026).
Who this affects
Both companies sell payroll, contractor payment, and employer-of-record software to the same enterprise HR buyers, and both have raised venture funding at multi-billion dollar valuations. Buyers currently evaluating either vendor are watching a case that touches data handling, internal access controls, and executive conduct at both companies. Procurement and legal teams running vendor risk reviews on either company should expect the litigation and the parallel DOJ inquiry to surface in due diligence conversations for as long as the case remains active.
Neither company has indicated the dispute affects product delivery or customer data for existing accounts. This report describes the state of a US federal civil case and a preliminary criminal inquiry as of July 2026. It is not a legal assessment of either company's exposure, and readers evaluating vendor risk should consult their own counsel rather than treat this account as legal advice.
What happens next
Discovery is ongoing. A trial date has not been publicly set. Case-tracking reports since May 2026 have pointed to late 2026 or early 2027 depending on how the current round of motions, including Deel's July 14 motion to strike, resolves. The next concrete milestone to watch is the court's ruling on Deel's motion to exclude O'Brien's testimony, which will shape how much of his affidavit is admissible ahead of trial.
Sources
- Bloomberg, "HR Startup Deel Moves to Strike 'Spy' Witness in Rippling Lawsuit" - https://www.bloomberg.com/news/articles/2026-07-14/hr-startup-deel-moves-to-strike-spy-witness-in-rippling-lawsuit
- Staffing Industry Analysts, "Deel moves to strike 'spy' witness in Rippling lawsuit" - https://www.staffingindustry.com/news/global-daily-news/deel-moves-to-strike-spy-witness-in-rippling-lawsuit
- CTech (Calcalist), "Newly unsealed documents tie Deel to payments for alleged Rippling spy, while Deel points to witness incentives" - https://www.calcalistech.com/ctechnews/article/h1ysgtng11l
- CTech (Calcalist), "Justice Department opens criminal investigation into Deel over espionage allegations" - https://www.calcalistech.com/ctechnews/article/s1jroxz8zg
- PYMNTS, "Justice Department Investigates Allegations That Deel Recruited Spy at Rival Firm Rippling" - https://www.pymnts.com/legal/2026/justice-department-investigates-allegations-that-deel-recruited-spy-at-rival-firm-rippling/
- Nearshore Americas, "Alleged Spying at the Heart of Court Fight Between Deel and Rippling" - https://nearshoreamericas.com/alleged-spying-at-the-heart-of-court-fight-between-deel-and-rippling/
- TechCrunch, "The Rippling/Deel corporate spying scandal may have taken another wild turn" - https://techcrunch.com/2026/01/23/the-rippling-deel-corporate-spying-scandal-may-have-taken-another-wild-turn/