The rivalry between HR companies Rippling and Deel has escalated, with Rippling filing a lawsuit against Deel on Monday. The 50-page complaint accuses Deel of racketeering, misappropriation of trade secrets, tortious interference, unfair competition, and aiding and abetting a breach of fiduciary duty. The lawsuit centers around an employee who allegedly worked as a spy for Deel while employed at Rippling.

Deel has denied the allegations, calling them “sensationalized claims” in a statement to TechCrunch. The company claims that Rippling is trying to shift the narrative after being accused of violating sanctions law in Russia and spreading falsehoods about Deel.

Is this town big enough for the both of us? 

The HR technology space is highly competitive, with major incumbents like SAP, ADP, and Workday, as well as numerous startups targeting various aspects of HR. Companies like Deel and Rippling aim to provide an all-in-one platform for these services. The market is particularly crowded, and tensions between the two companies have been simmering.

The rivalry between Deel and Rippling has been playing out publicly for some time. Last year, Rippling launched a marketing campaign that directly targeted Deel, featuring a “Snake Game” that portrayed Deel as a snake and accused the company of charging higher fees. The game is still accessible online.

The feud took a turn when a Deel sales director visited the site, engaged with a chatbot, and later saw the exchange posted on Twitter by Rippling’s COO. The incident sparked allegations of doxxing by Rippling. The companies have also faced scrutiny over compliance with Russian sanctions.

Slack forensics played a major role in the suit

Rippling’s lawsuit relies heavily on evidence from Slack activity, which the company logs and tracks. The logs show a sudden spike in activity from an employee, referred to as D.S., who was accessing channels and documents unrelated to their role in payroll operations.

The channels D.S. accessed contained confidential sales and business strategy discussions, with a particular emphasis on Deel. The lawsuit alleges that D.S. viewed channels related to Rippling’s competitive intelligence concerning Deel over 450 times and downloaded related exchanges and documents.

The drama is real

Rippling set up a “honeypot” to test its suspicions, creating a fake Slack channel and sharing its name with Deel executives. The company then monitored D.S.’s activity, which allegedly showed that they searched for the channel. The situation escalated when an independent solicitor attempted to seize D.S.’s phone by court order.

The lawsuit claims that D.S. escaped to the bathroom, locked the door, and refused to come out, despite warnings from the solicitor. It is alleged that D.S. may have attempted to flush their phone down the toilet rather than provide it for inspection. D.S. eventually left the bathroom and stormed out of the office, saying “I’m willing to take that risk.”

Rippling has not responded to questions about whether it intends to file a suit against D.S. or confirm their identity. However, the company has provided enough information to make it relatively easy to identify the alleged spy on LinkedIn, where the person’s profile has since been deleted.