US federal judge deals Deel fresh setbacks in Rippling spying case

A US federal judge in San Francisco handed Deel fresh setbacks on Friday in the corporate-espionage lawsuit brought by rival Rippling. The judge refused the company's bid to strike the testimony of the case's central witness and ordered its most serious counterclaims into arbitration. Bloomberg reported the ruling.

Three losses in one order

The federal court for the Northern District of California declined to reopen its earlier decision letting Rippling's claims proceed. Rippling's case rests not only on breach of contract but on federal racketeering law and trade-secret protections.

The judge also refused to exclude testimony from Keith O'Brien, the central witness in the dispute, and sent Deel's heaviest counterclaims to arbitration, a forum with no jury and far less public exposure than a courtroom. He dismissed several of Deel's claims that Rippling engaged in false advertising, but allowed others to move forward.

What Rippling alleges

Rippling, which does business as People Center, Inc., sued Deel in March 2025. It alleges Deel paid a Rippling employee to secretly harvest trade secrets, sales pipeline data and customer playbooks over several months. Court filings describe more than 6,000 Slack searches and access to over 600 customer records he had no business reason to touch. Rippling put the payment at roughly $6,000, a sum Deel has confirmed changed hands, though the two sides tell very different stories about what it was for.

Deel had already failed to move the case to Ireland on forum non conveniens grounds, and it tried once before to exclude O'Brien's testimony. "Deel's efforts to avoid facing justice continue to collapse," Rippling said in a statement. Deel denies any wrongdoing.

What comes next

The dispute is far from settled. Deel filed a defamation suit against Rippling in Delaware last year, and some of its false-advertising claims survived Friday's order even as the larger counterclaims went to arbitration. Both companies remain among the best-capitalized players in HR technology, and 18 months of litigation has not visibly damaged their valuations yet.