Employment Agreement

What should I look out for in my Toptal Contractor Agreement?

Nov 14, 2023

We first covered Contractor Agreements in one of our earliest blog posts, and the response from the freelance community was immediate. All too often, large companies have outsized negotiation leverage compared to freelancers, and even short-term contracts can have long-term restrictions. This week, we review a typical Contractor Agreement from Toptal, one of the most popular freelance marketplaces, to see which terms are favorable and unfavorable to the individual contractor. Of course, not all agreements are the same, and contracts are changing all the time, but we hope this post sheds light on the types of terms to look out for.

Unfavorable: Toptal isn’t ultimately responsible for collecting your fees

While Toptal will try their best to collect the fees you’re due for your work, within the contract is a line that ultimately frees them of that responsibility if their efforts don’t work. Look for a clause that includes the following: “if Toptal is ultimately unable to collect Talent’s fees from Client it is possible Talent may not be paid.

Unfavorable: Your work can include Trial Periods where you don’t get paid

Your engagements with clients can begin with a Trial Period of up to 10 days, or longer with Toptal’s (not your) consent. That means if the client is unhappy with your performance during that period of time, you don’t get paid at all. If the client terminates for reasons besides your performance or misconduct, you receive 50%, which is still less than what your work is valued for that period of time.

Unfavorable: You are bound by strict Non-Circumvention terms during and after leaving Toptal

While it’s understandable for Toptal to protect their marketplace and run a viable business, you are required to abide by the following terms during and for 12 months after leaving Toptal:

  1. You will not solicit any employees or consultants to negatively alter their relationship with Toptal or a Client.

  2. Without Toptal’s prior written consent, you can’t independently work with a Client you were introduced to or worked for on Toptal.

  3. You will not refer any engineers directly to the Client.

  4. You are liable to pay $30,000 within 10 days for each breach.

Particularly strict and potentially unenforceable depending on where you live are points (3) and (4), which affect the livelihood of others not on Toptal and levy crippling financial penalties on you as an individual freelancer.

Unfavorable: Toptal can use your name and likeness in promotions and allow others to as well

Nested within the clause to waive your Moral Rights to all work are terms that also allow Toptal to, or assign others the right to, use your name and likeness in promotions. While you can revoke this permission in writing, it can only be done after termination of the entire Contractor Agreement with Toptal (in other words, you can’t find work through Toptal anymore), and it does not apply to already published materials (so their existing promotions stay public).

Favorable: You can continue to take work outside of Toptal

The most important part of a freelancer’s business is their clientele, so it’s important that Toptal maintains a clause called “Freedom to Undertake other Contracts”, which enables you to continue as an independent contractor for other clients unrelated to Toptal. Of course, their disclaimer allows these projects so long as they don’t conflict with the rest of the agreement, so the burden of proof might be on you for clients who have a Toptal presence, but engage with you independently.

Our full review of the nearly 10 page-long Toptal Contractor Agreement covers over 35 clauses such as Changes to Work Scope, Termination, Ownership Rights, and Sub-Contractor Usage. As it’s important for us to ensure that individual freelancers know what they’re signing up for when it comes to their small business, we’re happy to provide this report free of charge to any freelancers who reach out to team@askginkgo.com

For advocacy and beyond,
The Ask Ginkgo Team

stay in the loop

Subscribe for Negotiation Tips.