Deel scores a lawsuit win, but not against Rippling

A Florida judge on Tuesday dismissed a lawsuit filed against embattled HR and payroll provider Deel. And while Deel described this as a “Rippling-aligned” and “Rippling-supported” lawsuit, this is not the infamous lawsuit filed by its rival earlier this year that involved an alleged corporate spy.

Rippling CEO Parker Conrad even went so far as to say “This litigation has nothing to do with Rippling, we are not a party to it, did not fund it,” in a tweet. (Rippling representatives declined further comment.)

Still, this is some good news for Deel. In January, a lawsuit was filed in Florida by Melanie Damian, who accused Deel of helping Russian entities sidestep U.S. sanctions by processing payments for Surge Capital Ventures.

Surge had been part of a separate U.S. SEC action alleging it was involved in a Ponzi scheme that defrauded church members out of $35 million. Damian, a court-appointed receiver for Surge, was tasked with the mission to recover assets, Semafor reported at the time. She filed the class action lawsuit on behalf of Surge, attempting to blame Deel for processing the payments. This is the case that was dismissed.

Deel is attempting to tie this case to the suit filed by Rippling in part because Damian’s lawyers cited the Racketeer Influenced and Corrupt Organizations Act (RICO).

Rippling, who is suing Deel in California, is also claiming Deel violated RICO, as well as the Defend Trade Secrets Act, and California state law, as TechCrunch previously reported. RICO is famously the statute that was originally used to charge mobsters.

Rippling’s lawsuit, however, involves one of its own employees who testified in an Irish court that he had been acting as a paid corporate spy for Deel. 

Deel is clearly hoping that if one court dismisses a lawsuit arguing RICO violations, another court will also dismiss. “The ruling invites further questions on the credibility of another baseless set of RICO accusations by Rippling in California,” a Deel spokesperson told TechCrunch in an emailed statement. 

But as these cases involve different actions and circumstances, we’ll all have to wait and see how the California court responds. Meanwhile, Deel is also suing Rippling, claiming that one of Rippling’s employees was unlawfully impersonating a customer.

On top of all of that, the person who confessed to being Deel’s alleged corporate spy, Keith O’Brien, successfully filed a restraining order against people he said were following him and scaring his family. O’Brien is now Rippling’s star witness in its case against Deel. 

At first, lawyers for Deel denied involvement and later they admitted the company had hired “discrete surveillance” of O’Brien, according to court testimony seen by TechCrunch, and first reported by the Irish Independent. 

“Alex and his father can deflect and delay but they will face the music when we get our day in court,” Conrad added in his tweet, referring to Rippling’s case that names Deel’s founder CEO Alex Bouaziz and his father, who is chairman and CFO, Philippe Bouaziz.

“Deel will explore all its options for relief, defend itself vigorously against pending cases and continue to focus on winning in the marketplace,” a Deel spokesperson said in that statement.

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