Runlayer and Rippling Dismiss Cross-Lawsuits as Rippling Launches Competing AI Gateway

Runlayer and Rippling have formally dismissed their dual enterprise software lawsuits without any exchange of settlement capital or legal fee reimbursements, according to court documents first reported by TechCrunch AI. Immediately following the mutual dismissal, Rippling officially released its enterprise Model Context Protocol (MCP) gateway—the specific product line that sparked the legal clash between the two tech companies.

The legal confrontation stemmed from Runlayer’s allegation that Rippling breached non-disclosure and evaluation contracts during product trials. Runlayer, an artificial intelligence security startup that emerged from stealth mode in November 2025, has secured $42 million in venture capital funding from investors including Felicis and Khosla Ventures general partner Keith Rabois. The company is led by chief executive officer Andrew Berman, a third-time founder who previously launched smart baby monitor maker Nanit and AI conferencing developer Vowel, which Zapier acquired in 2024.

According to Runlayer’s initial court complaint, the engineering teams of both companies collaborated closely for over a year while Rippling evaluated Runlayer’s MCP gateway infrastructure. Despite the extended evaluation period, Rippling opted not to sign a commercial software license. Instead, Berman received a text message from a Rippling staff member stating that the workforce management provider was developing an internal replacement that the employee characterized as a clone of Runlayer's proprietary system.

Runlayer filed suit over the contract violations, prompting Rippling to respond with a counter-complaint alleging patent infringement. Legal observers noted that the countersuit appeared designed to escalate litigation costs and incentivize Runlayer to abandon its primary claims. After spending three weeks conducting formal evidence discovery, Runlayer withdrew its lawsuit. Rippling subsequently dropped its patent suit, leaving neither party with monetary recovery.

At the core of the dispute is MCP gateway technology, an enterprise architecture layer designed to govern how autonomous AI agents request internal data across business systems. Rather than granting artificial intelligence tools open database permissions—such as pulling sensitive candidate records from a human resources portal—the gateway safely acts as a broker. It applies security policies including role-based corporate access, usage monitoring, and system activity logs.

With the legal proceedings concluded, Rippling has formally pushed beyond its core human resources, payroll, and corporate benefits services into broader software infrastructure. Its newly launched product handles multi-model AI routing alongside real-time token tracking per employee, bringing the corporate management firm into direct competition with established technology vendors like Stripe, Ramp, and Databricks.

Furthermore, by embedding role-based access management into its MCP software, Rippling is competing in the AI security market against established providers such as Docker, Amazon Bedrock, and Runlayer itself. Runlayer is countering this expansion by offering a broader platform of autonomous agent governance tools, including capabilities aimed at discovering unapproved shadow AI implementations deployed across corporate networks.