A federal judge in San Francisco ruled in February 2026 that Rippling's corporate espionage lawsuit against rival payroll platform Deel can proceed toward trial, rejecting Deel's bid to dismiss the case or shift it to an Irish court. Weeks earlier, the Justice Department had opened its own criminal investigation into the same spying allegations. What started as a dispute between two HR software vendors is now playing out in three courts on two continents, with a grand jury in the mix, while both companies pursue multibillion-dollar valuations and possible public listings.
A confessed mole inside Rippling's Slack
Rippling sued Deel in the US District Court for the Northern District of California in March 2025, alleging Deel recruited a Dublin-based Rippling employee, Keith O'Brien, to search Rippling's internal Slack workspace for competitive intelligence and pass it to Deel. O'Brien confessed in an affidavit made public through an Irish court proceeding, saying he was paid roughly 5,000 euros a month in cryptocurrency to gather information on Rippling customers considering a move to Deel, The Register reported in April 2025.
Court records unsealed later in the US case showed a 6,000 dollar payment moving from a Deel-linked Revolut account through the personal account of Alba Basha, wife of Deel Chief Operating Officer Dan Westgarth. The money reached O'Brien within about a minute, according to Calcalist's review of the filings. Deel has denied directing payments as alleged and has called Rippling's version of events a smear campaign, TechCrunch reported.
From civil claim to criminal investigation
The dispute escalated in January 2026, when the Justice Department opened a criminal investigation into the alleged scheme and issued grand jury subpoenas, according to TechCrunch and PYMNTS. Deel has said it was not previously aware of a criminal probe and would cooperate.
On February 13, 2026, Judge Charles Breyer of the Northern District of California denied Deel's motion to dismiss. He ruled that Rippling had adequately alleged violations of federal racketeering and trade secret law by Deel and named executives, including CEO Alex Bouaziz, and rejected Deel's request to move the dispute overseas, The Information and Bloomberg Law reported. The civil case is now moving into discovery ahead of trial.
Countersuits and a split-jurisdiction fight
Deel has not simply defended itself. In April 2025, it sued Rippling for defamation in Delaware state court, accusing Rippling of running its own campaign against Deel and alleging a Rippling employee had infiltrated Deel's platform under a false identity, according to Bloomberg and TechCrunch.
Rippling separately brought a case against Bouaziz and two other Deel executives in Ireland's High Court, where O'Brien had been based. Bouaziz challenged the Irish court's jurisdiction over him personally in December 2025, and in March 2026 the court agreed, removing him and two colleagues as defendants in that proceeding, the Irish Times reported. The US case, which names Deel Inc. directly rather than the individuals, was not affected by that ruling.
The evidence fight continues on the US side too. In July 2026, Deel asked the federal court to strike O'Brien's testimony after he declined to answer more than 100 of Deel's questions during discovery, Bloomberg reported. A lawyer for O'Brien said his client was not invoking the Fifth Amendment and would respond to the questions.
Why this matters to buyers
Deel and Rippling are two of the highest-valued global payroll and employer-of-record platforms, both used by companies to run compliant payroll, benefits, and hiring across dozens of countries at once. Both are also positioning for a public listing. Deel raised 300 million dollars at a 17.3 billion dollar valuation in October 2025, Bloomberg reported, after telling CNBC in February 2025 that it was preparing for a possible 2026 IPO. Rippling raised 450 million dollars at a 16.8 billion dollar valuation in May 2025, CNBC reported.
Neither company has said the litigation affects its listing plans. But a live federal racketeering case naming a sitting CEO, paired with an active DOJ criminal investigation, is now a fact any enterprise evaluating either vendor has to weigh. It is also something either company will eventually have to address in an IPO prospectus, if it files one while the case remains unresolved.
What to watch next
Judge Breyer said in February he would issue a full written opinion explaining his ruling on the motion to dismiss. That opinion, once filed, will set the scope of what goes to trial and could clarify which claims against Bouaziz and other named executives survive. The fight over whether O'Brien's testimony can be used remains unresolved. A grand jury indictment, if one comes, would mark the clearest escalation yet in a case that has already outgrown the ordinary bounds of a vendor rivalry.