Rippling vs. Deel: Is Greed Good in the Startup World?

The global technology and human resources market recently witnessed a scandal worthy of major corporate espionage stories: Rippling, a giant valued at over $13 billion, filed a lawsuit directly accusing its competitor Deel, valued at $12 billion, of industrial espionage. Beyond the serious accusation, the case was accompanied by surprising—and, it must be said, cinematic—details about how the alleged spy was discovered.

According to Rippling, an employee based in Ireland was illegally accessing internal Slack channels, seeking sensitive information about business strategies and expansion plans, especially related to Deel. To confirm the suspicion, Rippling set a trap—known in digital security jargon as a honeypot —by creating a fictitious channel on Slack where employees supposedly discussed Deel negatively. The suspect's swift reaction, visiting the fake channel just hours after the trap was set, was enough to convince the company of the existence of an espionage operation orchestrated by the rival. 

The situation took an even more dramatic turn when, upon receiving a court order to surrender his phone, the suspect rushed to the bathroom and allegedly attempted to destroy it, even trying to flush the device down the toilet. This behavior, reminiscent of a typical police movie scene, only reinforced suspicions and further exacerbated the scandal.

This episode recalls other famous cases of corporate espionage, such as the historic dispute between Coca-Cola and Pepsi, which involved employees exchanging confidential information about recipes and business strategies, or the recent case involving Uber executives, who were accused of industrial espionage against Google in the race for autonomous vehicles. The Enron scandal, although not directly related to espionage, also serves as a striking example of ethical and compliance failures that brought down a giant and permanently transformed the financial market.

Culturally, it is impossible not to recall the classic film Wall Street (1987), where Gordon Gekko immortalized the phrase “greed is good,” reflecting a distorted view of business ethics. But if anything can be learned from fiction—and the real cases mentioned—it is that neglecting internal controls and good governance practices has real and often disastrous consequences for the companies involved.

What the Rippling vs. Deel conflict exposes is precisely the urgent need to strengthen internal controls in companies of all sizes. It is essential for organizations to establish clear information security policies, limit internal access, and implement robust monitoring and auditing systems. More than just preventing corporate espionage, these practices are pillars of a solid and ethical organizational culture, drastically reducing legal and reputational risks.

One compliance. A structured framework, supported by solid and effective corporate governance, has become more indispensable than ever. Well-defined internal controls, aligned with international best practices and with clear mechanisms for reporting and internal investigation, are valuable tools not only in protecting against misconduct but also in avoiding costly legal conflicts and image crises.

The lesson from the dispute between Rippling and Deel is clear: ignoring the importance of compliance and governance is no longer a viable option for companies that wish to thrive sustainably—including startups. It is time to recognize that good practices are not just legal obligations but strategic investments that ensure the integrity and longevity of companies in the global market.

As Gekko would discover decades later, greed is not good when it is unaccompanied by responsibility and corporate ethics. In the real world, sustainable businesses are built on trust, transparency, and respect for the rules of the game—something that all companies, regardless of size, would do well to remember, for in the business world, unlike in the movies, there is not always a second chance to rebuild a lost reputation.

*Matheus Martins holds a specialization in Business Law from Fundação Getúlio Vargas (FGV) and in Private Equity, Venture Capital, and Startup Investments, also from FGV. He is also a partner at Barcelos Martins Advogados, a law firm focused on legal solutions for startups.