A Florida judge dismissed a lawsuit against the HR and payroll provider Deel on Tuesday. Deel described the case as a “Rippling-aligned” and “Rippling-supported” lawsuit. However, this is not the separate, high-profile lawsuit filed by its rival Rippling earlier this year that involved an alleged corporate spy.
Rippling CEO Parker Conrad stated that this particular litigation had nothing to do with his company. He wrote that Rippling was not a party to the case and did not fund it. Representatives for Rippling declined to provide further comment.
The dismissal offers some positive news for Deel. The lawsuit was originally filed in January by Melanie Damian, a court-appointed receiver for Surge Capital Ventures. She accused Deel of helping Russian entities circumvent U.S. sanctions by processing payments for Surge. Surge had been the subject of a separate U.S. Securities and Exchange Commission action alleging the company operated a Ponzi scheme that defrauded church members out of $35 million. Damian’s lawsuit, filed on behalf of investors, alleged Deel was responsible for processing the payments. This is the case that has now been dismissed.
Deel is attempting to connect this case to the suit filed by Rippling, partly because Damian’s lawyers cited the Racketeer Influenced and Corrupt Organizations Act, or RICO. Rippling’s lawsuit against Deel in California also alleges RICO violations, along with violations of the Defend Trade Secrets Act and California state law. The RICO statute was originally famous for prosecuting organized crime.
Rippling’s lawsuit involves a different set of allegations centered on a Rippling employee who testified in an Irish court that he had been acting as a paid corporate spy for Deel.
Deel appears to hope that if one court dismisses a lawsuit alleging RICO violations, another court will follow suit. A Deel spokesperson said the ruling invites questions about the credibility of Rippling’s RICO accusations in California. However, as these cases involve different actions and circumstances, the outcome in the California court remains to be seen.
Meanwhile, Deel is also suing Rippling, claiming that one of Rippling’s employees was unlawfully impersonating a customer.
In a related development, the person who confessed to being Deel’s alleged corporate spy, Keith O’Brien, successfully obtained a restraining order against people he said were following him and frightening his family. O’Brien is now a key witness for Rippling in its case against Deel. Lawyers for Deel initially denied involvement but later admitted the company had hired “discreet surveillance” of O’Brien according to court testimony.
Rippling CEO Parker Conrad added in a tweet that Deel’s founders, Alex Bouaziz and his father Philippe Bouaziz, will face the music when the case gets to court. A Deel spokesperson stated that the company will explore all its options for relief, defend itself vigorously, and continue to focus on competing in the marketplace.