Demonstrating that no industry is immune to controversy – and highlighting the need for solid risk mitigation strategies – a shocking scandal has just rocked the HR tech sector.
Rippling, a company specializing in workforce management, has taken legal action against its rival Deel, accusing it of corporate espionage. According to the lawsuit, Deel allegedly devised a plan to gain unauthorized access to Rippling’s internal systems by enlisting one of its employees to spy. Over the course of several months, the recruit reportedly accessed sensitive data, including sales leads, pricing strategies, and high-level business plans – all information that could be used to strengthen Deel’s market position.
Rippling’s lawsuit seeks damages and a jury trial, accusing Deel of racketeering and theft of trade secrets. Deel has rejected all accusations, characterizing Rippling’s claims as exaggerated and a deliberate distraction from Rippling’s own legal troubles – namely, allegations that it breached international sanctions related to Russia.
As is often the case when businesses sue each other, Rippling and Deel, valued at a combined $12B, are taking on reputation damage. The more an uncomfortable spotlight shines on their legal battle, the more other issues that might otherwise stay in the deep background come to light. That’s not to say that a business shouldn’t sue a rival (businesses should defend themselves when they’re attacked), but businesses have to calculate the potential collateral damage that occurs when a fight goes public BEFORE you take action.
Potentially lost in all of this airing of dirty laundry is the fact that Rippling hired someone it now accuses of being a corporate mole. In a sense, it might have been a self-inflicted injury.
There’s a deeper takeaway here: the critical importance of integrating crisis mitigation into the HR and hiring process. In a landscape where corporate espionage is a real and growing threat, this isn’t just smart – it’s essential. From implementing more thorough vetting of new hires to actively monitoring for unusual internal behavior, and to establishing clear, enforceable policies that drive accountability, a proactive approach to risk management can make all the difference.
Here are a few thought starters you can discuss at your next team meeting to help your leaders and team see whether your business is ready to handle a crisis:
Discussion Questions:
- What would you do if your business was in Rippling’s shoes? What if your business was in Deel’s shoes?
- What are the first steps you would take to insulate your organization from this type of insider threat?
- What actions can you take today to strengthen a culture of accountability across your organization?
Kith facilitates crisis preparedness workshops that will help your company attain the clarity, trust, and speed you need to respond confidently – no dithering! – to any crisis. We’d be happy to have a conversation about how we can help your company be ready to chart an effective course to reputation protection.
Looking for more fresh insights? Crisis of the Month is a no-fluff Substack that breaks down real-world crises and what they teach us about leadership, communication, and damage control. Whether you’re in comms, ops, or just crisis-curious, this is your monthly guide to what went wrong — and how to do it better. Sign up today!
