Runlayer and Rippling drop lawsuits in MCP gateway dispute
Startup Runlayer and workplace platform Rippling have both withdrawn their lawsuits against each other without a settlement or payment. The dispute centered on an AI agent access tool known as an MCP gateway.
On Wednesday night, Runlayer and Rippling withdrew the lawsuits they had filed against one another. According to court documents reviewed by TechCrunch, no settlement was reached and no money changed hands — not even for legal fees.
Shortly after dropping its suit, Rippling released its own MCP gateway, the very product that had been at the center of the dispute and that directly competes with Runlayer's offering. Such a gateway securely manages how a company's AI agents request data from other software systems — for example, pulling job-candidate details from a recruitment platform — while also enabling role-based access controls and usage tracking.
Background of the dispute
Runlayer is an early-stage startup that emerged from stealth in November 2025 and has raised $42 million from investors including Khosla Ventures and Felicis. It is led by Andrew Berman, a third-time founder whose earlier ventures include baby-monitor maker Nanit and video-conferencing tool Vowel, which was acquired by Zapier in 2024.
According to Runlayer's lawsuit, Rippling tested its MCP gateway for more than a year, with the two companies' engineering teams collaborating closely, but Rippling never became a paying customer. Instead, Berman received a message from a Rippling employee saying the company was building its own version of the product, described as a clone of Runlayer's. Runlayer sued over alleged breach of contractual terms governing the testing period, and Rippling countersued alleging patent infringement — a move Runlayer viewed as an attempt to drive up its legal costs and pressure it into dropping the case.
Runlayer withdrew its suit after roughly three weeks in the discovery phase, and Rippling dropped its countersuit without collecting any settlement.
Why it matters
The episode illustrates how quickly the AI industry is shifting: a company evaluating a startup's product can end up becoming its competitor within months. Rippling, historically focused on payroll and benefits software, has now expanded into the AI gateway and AI security markets, putting it in competition with companies such as Stripe, Ramp, Databricks, Docker, and Amazon Bedrock.
