The corporate espionage war between HR tech giants just went federal. The Department of Justice has reportedly opened a criminal investigation into Deel over allegations the $17.3 billion unicorn hired a corporate spy to infiltrate rival Rippling, according to The Wall Street Journal. The probe marks a dramatic escalation in what's become the most explosive scandal in startup history, with two multi-billion dollar companies locked in a legal battle involving alleged RICO violations, surveillance, and witness intimidation.
The gloves are off, and now the feds are watching. The Department of Justice has reportedly opened a criminal investigation into Deel, the $17.3 billion HR and payroll startup, over allegations it orchestrated a corporate espionage scheme against its biggest rival Rippling, according to The Wall Street Journal.
In a statement to TechCrunch, Deel says it's "not aware of any investigation" but will "always cooperate with the relevant authorities and provide any necessary information in response to valid inquiries." The company then pivoted to attack mode, pointing to its countersuit alleging Rippling has been conducting a "smear campaign" and insisting "the truth will win in court." Rippling declined to comment.
This isn't just startup drama anymore. It's a full-blown legal war that's attracted federal prosecutors, white-collar defense attorneys who've represented Elon Musk, and enough courtroom theatrics to fill a John Grisham thriller.
The saga kicked off last May when Rippling sued Deel, alleging its rival had planted a corporate mole inside the company. painted an even darker picture, accusing Deel of running what Rippling called a "criminal syndicate" that spied on at least four other competitors. The lawsuit invoked RICO statutes - federal racketeering laws typically reserved for organized crime operations.
