Runlayer Trial With Rippling Ends in Clone Lawsuit

Runlayer sued Rippling in Manhattan federal court on July 28, 2026, claiming the HR software giant turned a nearly year-long product trial into a near-identical MCP gateway. The 32-page federal complaint alleges trade-secret misappropriation, unfair competition and breach of contract after the parties failed to agree on price.

Rippling confirms it is launching its own MCP gateway and calls the claims fabricated. The case, Anysource Inc. d/b/a Runlayer v. People Center Inc. d/b/a Rippling, No. 1:26-cv-06410 (S.D.N.Y.), seeks a preliminary injunction and damages.

The Trial That Shared Source Code

Runlayer, a New York AI enablement and governance startup, builds a secure Model Context Protocol gateway. The tool sits between AI agents and enterprise systems to handle authentication, authorization, security scanning, policy and audit.

In 2025 the two companies signed a mutual NDA, then a trial agreement giving Rippling a limited evaluation-only license for the self-hosted enterprise AI/MCP gateway. The contracts barred copying, derivative works and any use beyond evaluation. They required return or destruction of materials on termination.

What followed was nearly a year of intensive engineering collaboration. Runlayer says it disclosed:

• Complete application source code in July and August 2025 for installation inside Rippling
• Deployment architecture, topology and operational know-how
• Customer-specific designs, roadmap sequencing and product priorities
• Runtime security controls, scanning logic and violation handling
• Audit/export architecture and credential-boundary decisions
• Pricing and usage data during commercial talks

By May 2026 thousands of Rippling employees were using the platform. The parties negotiated a whole-company license. Runlayer suspended service on June 12, 2026, after procurement talks stalled.

What the Insider Text Revealed

The same day service stopped, a Rippling insider texted Runlayer founder and CEO Andrew Berman on a personal line.

There’s been a project internally to build essentially a clone o[f] Runlayer… It’s not feature complete by any means but it’s almost a 1 to 1 copy of Runlayer… From what I hear it will even be offered as a stand alone SKU… it smells like a Parker thing.

The message, quoted in the complaint, referred to CEO Parker Conrad. The insider said the project began as MCP support for Rippling AI but expanded toward a commercial product. Runlayer says Rippling already placed an MCP Gateway feature in a customer-facing demo environment.

Berman said in a statement that Runlayer “invests heavily in its innovations and proprietary technologies and will vigorously defend its intellectual property.” Rippling’s spokesperson replied that the startup’s “panicked effort to avoid competition by fabricating claims is not an effective way to deal with its business failures” and that Rippling is launching “a superior product… using only our proprietary information.”

MCP Gateways Fill Up Fast

Anthropic open-sourced the Model Context Protocol in November 2024 as a universal standard for connecting AI models and agents to external data and tools. Gateways add the enterprise layer: identity, policy, threat detection and observability.

Runlayer emerged from stealth in late 2025 with an $11 million seed and later raised a $30M Series A led by Felicis with Khosla Ventures, bringing total funding to $42 million. Customers named publicly include Instacart, Gusto, Decagon, Opendoor and several Fortune 500 firms. Rippling’s own Technology Lead for Developer Experience, Tim Fall, told researchers in April 2026 that Runlayer was the only vendor he knew that had solved the full set of AI enablement and governance challenges.

The field has grown crowded. Startups and incumbents race to own the control plane as agents proliferate inside companies.

Rippling Has Sued Over Trade Secrets Before

The irony sits close to home. In March 2025 Rippling sued rival Deel over alleged spying. It claimed Deel cultivated a Rippling employee who conducted thousands of searches and funneled sales-pipeline data. That employee later admitted spying in an Irish court. Deel denied the claims and countersued.

1. November 2024, Anthropic releases MCP as open standard
2. Mid-2025, Runlayer launches product and begins Rippling trial after NDA and trial agreement
3. July-August 2025, Full source code shared for Rippling installation
4. April 2026, Rippling DevEx lead praises Runlayer as sole solver of the stack
5. May 2026, Thousands of Rippling users on platform; commercial talks intensify
6. June 12, 2026, Runlayer suspends service; insider text arrives same day
7. June 24, 2026, Runlayer announces $30M Series A
8. July 28, 2026, Lawsuit filed in SDNY; Sullivan & Cromwell retained

Rippling now finds itself on the other side of a trade-secret claim involving an AI infrastructure layer.

Who Feels the Pressure

Enterprise AI infrastructure sales already drag. Deep hands-on trials are common because buyers must prove security and scale before writing large checks. When the buyer is another tech company with thousands of engineers, the trial itself can become the R&D project.

Runlayer is a five-to-dozens person startup that poured time and infrastructure cost into the pilot. Losing the differentiation of its non-public architecture threatens fundraising leverage, pricing power and first-mover credibility in a still-forming market.

Rippling gains a potential native MCP capability it can sell to its existing base of more than 20,000 customers and bundle with its HR, IT and finance suite. It denies any misuse and says its product is superior and built on proprietary work.

Other MCP gateway vendors watch the same playbook. Sharing source under NDA is standard for self-hosted enterprise software. The complaint argues that practice now collides with buyers who can simply finish the build themselves.

• $42 million, Runlayer total venture capital raised
• Nearly one year, length of intensive engineering collaboration claimed
• Thousands, Rippling employees using the platform by May 2026
• June 12, 2026, suspension date and insider text day

The Court Fight Starts Now

Runlayer asks the court to enjoin Rippling from using the alleged trade secrets, launching or selling any competing product derived from them, and to award actual damages, unjust enrichment, a reasonable royalty, exemplary damages and fees for willful misappropriation under the Defend Trade Secrets Act and New York law. The NDA itself contemplated immediate injunctive relief for breach.

Rippling has not yet filed a formal response in the docket. Its public statement frames the suit as a business-failure distraction. Sullivan & Cromwell’s appearance gives the filing optical weight; it does not decide the merits.

For AI infrastructure founders the practical takeaway is already circulating on X and in founder chats: treat deep enterprise design partners like potential competitors, limit source access even under NDA, and price the risk of walk-away builds into every trial. The protocol layer that was supposed to standardize agent access is also standardizing the fight over who owns the control plane that sits on top of it.

Both companies now wait on the Southern District of New York while the MCP market keeps adding gateways.