Overview
- Runlayer filed a complaint in the Southern District of New York on Tuesday seeking damages, a jury trial, a preliminary injunction, and expedited discovery to block Rippling from developing or selling the disputed product.
- The suit says the two firms ran a nearly year-long commercial pilot during which Runlayer shared source code and a 'Gateway deployment architecture' under strict confidentiality terms and that negotiations to continue the relationship collapsed on June 12 when Runlayer cut off services.
- Runlayer cites three pieces of evidence it says warrant fast discovery: a June insider text warning of an internal Rippling project, an unsolicited screenshot received July 1, and Rippling job postings that match Runlayer’s confidential designs.
- Reporting differs on Rippling’s position: TechCrunch quotes a Rippling spokesperson denying misuse and confirming it plans its own MCP gateway, while other outlets noted Rippling had not provided a substantive public response to the allegations.
- The case pits a venture-backed startup that raised $42 million against a much larger HR-software firm and could set precedents for how startups protect AI safety and deployment technologies when partnering with bigger platform players.