Tim ZylaIn a corporate spying lawsuit alleging encrypted communications, under-the-table cryptocurrency payments and a secretive sting operation on Slack, global HR and payroll services companies Deel and Rippling have become entangled in a high-stakes legal battle that reads more like a thriller than a tech industry dispute.
An amended complaint filed in the U.S. District Court for the Northern District of California claims Deel CEO Alex Bouaziz was the chief architect behind a months-long corporate espionage scheme that had a Rippling employee acting as “James Bond” to convey internal communications to its competitor.
The lawsuit, originally filed by Rippling in March and amended in June, is supported by a 15-page affidavit signed by former employee Keith O’Brien, who details forming a relationship with Deel leadership and using his access to Rippling’s Slack infrastructure to search and convey insider secrets. Rippling is a direct competitor to Deel, with both companies offering HR, payroll and employer of record services globally.
Deel has subsequently countersued Rippling, alleging defamation and corporate espionage dating back further than Rippling’s claims. In its lawsuit filed in Delaware Superior Court, Deel claims a Rippling employee, Brett Johnson, infiltrated Deel’s customer platform by posing as an executive of a fictitious company.
Also in that lawsuit, Deel’s attorneys extensively highlighted the career of Rippling CEO Parker Conrad — noting he had dropped out of Harvard before eventually graduating and detailing perceived failures of his leadership with companies prior to Rippling. The countersuit also attacks Rippling Chief Technology Officer Prasanna Sankar, claiming he is on the run from Indian authorities amid allegations he sexually and physically abused his wife.
O’Brien Reveals Alleged Spying Scheme
After interviewing for a job at Deel and not being selected, O’Brien reached out to Bouaziz on LinkedIn seeking feedback as to why he wasn’t chosen. After several months of sporadic communications between the two, O’Brien told Bouaziz he had recently started a payroll consulting business while still employed at Rippling, which led to discussions with Deel Chief Operating Officer Dan Westgarth about the startup becoming a service provider for the company.
Shortly after, O’Brien said he informed Bouaziz about his intentions to leave Rippling and pursue full-time consulting work, which led to a WhatsApp call between the two.
“Alex told me he ‘had an idea,'” O’Brien wrote in the affidavit. “He suggested that I remain at Rippling and become a ‘spy’ for Deel, and I recall him specifically mentioning James Bond. I asked him what he meant. He said he would offer me a monetary reward if I agreed to spy on Rippling for Deel.”
Thirty minutes later, O’Brien called Bouaziz back and agreed to the proposal, and eventually he was informed he would receive 5,000 euros per month for his services, court documents show.
“I understood what Alex was asking me to do was wrong,” O’Brien wrote. “And I believe he knew it was wrong, too.”
After receiving an initial payment of $6,000 from the wife of Deel COO Dan Westgarth, O’Brien claims he was told by Deel CFO Philippe Bouaziz, the father of Alex Bouaziz, that he would be paid through cryptocurrency to ensure no trace was left. O’Brien provided the court with transaction records of being paid in Ethereum for the remainder of the alleged collusion.
Rippling Sets a Trap
Executives at Rippling were allegedly tipped off to the possibility of an existing spying campaign by a reporter from The Information. According to the lawsuit, the reporter referenced 13 internal Slack messages that had been obtained relating to potential business transactions with Russia-related sanctioned businesses.
Rippling’s investigation revealed that search terms such as “Iran,” “Russia,” “Belarus” and “Syria” had only been queried by one employee — O’Brien — court documents show. Amid suspicion that Deel was involved in the campaign, Rippling’s legal team created a Slack channel unknown to anyone in the company aside from the investigatory team and referenced it in an email to Philippe Bouaziz, Deel’s head of U.S. legal Spiros Komis, and an employment attorney at Deel’s outside law firm.
“Deel — through O’Brien — took the bait,” Rippling’s attorneys wrote. “Within hours of sending the letter referencing the #d-defectors channel — again, a channel that existed only as bait for Deel, and one which O’Brien could not have known existed absent a connection between himself and Deel — O’Brien ran the following searches in Slack:”
O’Brien said just minutes after he had been instructed to perform the searches in Slack, he was told by Alex Bouaziz not to search the terms because he felt it may be a trap. O’Brien informed the Deel CEO he had already performed the searches, to which Bouaziz allegedly replied, “Oh s—,” O’Brien’s affidavit claims.
Lawsuit Gets Filed, O’Brien Gets Scared
Within days, Rippling commenced legal action, first by attempting to confiscate O’Brien’s phone through an Irish court order when he arrived at his Dublin office. O’Brien lied and said he didn’t have the phone on him, then locked himself in a bathroom at the workplace and performed a factory reset on his cellphone, according to his own testimony.
“When I came out, I just wanted to get out of there,” O’Brien wrote. “I started to walk out, but the solicitor tried to stop me. He warned me that this was serious, and there was a court order requiring my cooperation. I said, ‘I’ll take that risk’ and left.”
Over the next few weeks, O’Brien became increasingly concerned about the seriousness of the situation, he said. He maintained communication with Deel’s attorneys, who he said vowed to protect him, but the relationship began to sour as O’Brien began to feel more and more cornered.
By the end of March, less than a month after the alleged scheme had been revealed, O’Brien agreed to cooperate. He said he ultimately came to the decision to provide an affidavit after his friend told him, “The truth will set you free.”
In the document filed June 5, O’Brien said he is concerned about how wealthy and powerful Alex and Philippe are, but he wants to begin doing what he can to make amends and right the wrongs he participated in.
In late June, O’Brien was granted a restraining order in Ireland after he claimed he had been followed by an unknown person in a black SUV on several occasions, which caused “emotional and psychological” damage for himself and his family. O’Brien’s lawyer has conceded that the defense is not in possession of evidence connecting the person in the SUV to Deel.
Deel has denied all accusations of wrongdoing and claims the alleged spying by Johnson was part of an effort to reverse-engineer its product to close the competitive gap.
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