IP Law Daily, TRADE SECRETS NEWS—Runlayer accuses Rippling of using evaluation access to build competing AI platform, (Jul 29, 2026)

By Patricia K. Ruiz, J.D.

The startup seeks an injunction and alleges trade secret misuse during a nearly year-long pilot project.

Anysource Inc., d/b/a Runlayer, filed suit against People Center Inc., d/b/a Rippling, alleging that Rippling used confidential information and trade secrets obtained during an evaluation of Runlayer's AI governance technology to develop a competing product. The complaint asserts claims for trade secret misappropriation under federal and New York law, unfair competition, and breach of contract. Runlayer seeks injunctive relief, expedited discovery, damages, attorney fees, and other remedies while it pursues arbitration between the parties (Anysource, Inc. v. People Center, Inc., No. 1:26-cv-06410 (S.D.N.Y. Jul. 28, 2026)).

Lawsuit. Runlayer filed its complaint July 28 in the U.S. District Court for the Southern District of New York. The company describes itself as an AI infrastructure provider that developed an enterprise AI enablement and governance platform, including a Model Context Protocol, or MCP, gateway designed to manage how AI agents access enterprise applications, tools and data sources. According to the complaint, the New York-based company has raised approximately $42 million in venture financing and serves Fortune 500 customers.

Rippling, a workforce-management software company headquartered in San Francisco, allegedly approached Runlayer in 2025 to evaluate whether Runlayer's platform could support Rippling's internal AI development efforts. The parties first executed a mutual nondisclosure agreement and later entered into a trial agreement that granted Rippling a limited license to use Runlayer's technology solely for evaluation purposes, according to the complaint.

Disclosures. Runlayer alleges that the evaluation evolved into an extensive engineering collaboration lasting nearly a year. The complaint states that thousands of Rippling employees were using Runlayer's platform by May 2026 and that the companies maintained a shared Slack channel through which they conducted architecture reviews, security demonstrations, deployment troubleshooting, workshops and roadmap discussions.

According to the complaint, Runlayer disclosed multiple categories of alleged trade secrets, including source code, deployment architecture, customer-specific designs, product-roadmap information, security controls, audit and observability systems, authorization designs and pricing information. The company contends that the information was disclosed solely to facilitate Rippling's evaluation of the platform and was subject to confidentiality and use restrictions contained in the parties' agreements.

Breakdown in licensing negotiations. The complaint alleges that while the companies expanded their technical collaboration, they also negotiated a long-term commercial relationship. Runlayer claims it offered a discounted enterprise-wide license but that the parties failed to reach agreement. According to the complaint, Runlayer informed Rippling on June 10, 2026, that it would suspend the pilot absent a commitment to move forward commercially and suspended service on June 12 after receiving no response from Rippling's procurement team.

Competing product development. Runlayer alleges that it learned of potential misuse of its information only after announcing the suspension. The complaint cites a June 12, 2026, text message from a purported Rippling insider who allegedly stated that there had been an internal project to build "essentially a clone" of Runlayer, adding that it was "almost a 1 to 1 copy of Runlayer." The insider allegedly said the project was being considered as a commercial product and could be offered as a standalone product.

The complaint further alleges that Runlayer later identified public Rippling job postings describing AI governance, skills orchestration, authentication and related functions. Runlayer also claims that evidence suggests Rippling has placed an "MCP Gateway" feature in a customer-facing demonstration environment and may be preparing a broader product release.

Rippling's alleged conduct, according to the complaint, amounted to the unauthorized use of evaluation-only access and confidential information to create a competing AI enablement and governance platform. Runlayer alleges that the conduct was deliberate and carried out despite contractual prohibitions on copying, creating derivative works, reverse engineering or using the technology outside the agreed evaluation purpose.

Claims asserted. Runlayer brings four causes of action: trade secret misappropriation under the federal Defend Trade Secrets Act, trade secret misappropriation under New York law, unfair competition under New York law and breach of contract. The company alleges that Rippling used confidential information and trade secrets obtained through the evaluation process to develop a competing platform and that such conduct violated both the parties' agreements and trade secret law.

The complaint states that Runlayer intends to initiate arbitration before the American Arbitration Association in New York and filed the federal action to preserve its claims and seek expedited discovery and preliminary injunctive relief pending arbitration.

Requested relief. Among other remedies, Runlayer asks the court to preliminarily and permanently enjoin Rippling from designing, developing, marketing, selling or commercializing any product or functionality allegedly developed using Runlayer's confidential information or trade secrets. The company also seeks expedited discovery, compensatory damages, punitive or exemplary damages, prejudgment and post-judgment interest, and attorneys' fees and costs.

The Case is No. 1:26-cv-06410.

Judge: Cote, D.

Attorneys: Alexander Nourse Gross (Sullivan & Cromwell, LLP) for Anysource, Inc.

Companies: Anysource, Inc.; People Center, Inc.

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