Rippling and Runlayer dropped their mutual lawsuits on Wednesday, August 20, 2026, with no settlement reached and no money changing hands — not even lawyers’ fees, according to court documents reviewed by TechCrunch. Rippling marked the occasion by immediately releasing its MCP gateway, the product that had been at the center of the dispute.
The conflict began after Rippling tested Runlayer’s MCP gateway for more than a year, with the two companies’ engineering teams working closely together. Rippling never became a paying customer. Instead, Runlayer founder Andrew Berman received a text from a Rippling employee saying the company was building its own competing MCP gateway — and describing it as a clone of Runlayer’s product. Runlayer sued, alleging Rippling had violated contractual agreements covering the product tests. Rippling countersued, claiming Runlayer had infringed on its patents — a move Runlayer characterized as an attempt to pressure it into dropping its suit while driving up legal costs. Runlayer dropped its case after three weeks in discovery; Rippling followed.
Runlayer is an early-stage startup that launched out of stealth in November 2025 and has raised $42 million from investors including Khosla Ventures’ Keith Rabois and Felicis. Berman previously founded baby-monitor company Nanit and AI video conferencing tool Vowel, which sold to Zapier in 2024. An MCP gateway securely manages an enterprise’s AI agent requests for data from other software systems, adding features such as role-based access control and usage logging.
With its new MCP gateway now live, Rippling — historically focused on payroll and benefits management — has entered the AI security market, competing with Runlayer, Docker, and Amazon Bedrock, among others.
The episode may serve as a warning for AI startups: lengthy enterprise product evaluations carry real risk in a fast-moving market, where a prospective customer could emerge as a direct competitor before a deal is ever signed.
Source: TechCrunch