Are "on the side" jobs legal with mechanics?

Rumor has it there is a Dodge Dealer mechanic that lives nearby that does "work" outside of dealership. He does it on his free time and you can really save some coin. For example we had a AC leak that required a full dash removal in a Intrepid, saved hundreds if not thousands on Dealer shop rate.

Does this happen often generally, and how is it even legal to do this?
If a non compete was never signed, I see nothing wrong with it. I was not a mechanic by trade but I did side work early in my career when I needed extra money.
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Whether it is legal or not depends on the local. Much like you can sell 3 cars privately a year in GA without a dealer license (at least that was on the books last time i looked) at some point this is a business.

When I worked at the dealer there was nothing wrong with it as long as a few rules were followed (which would seem to be common sense). I sometimes did a side job but it was usually for friends or at least friends of friends, and usually for people that could never afford to take it to the dealer. I would usually do it for what I would have made off of it at the dealer or slightly more if I spent time getting parts or whatever, which barely made it worthwhile most of the time.
i once worked at a dealership that our lead technician took almost half our entire customer base away with him when he opened his own business. I’d say 40%. He obviously recruited these people/customers, but truth is he was a great tech and had himself a great business for a lot of years. I’ve seen it other places too, and they’ll usually steal a good tech to go with them.

But as far as actual side work. It’s not illegal that I know of. And I think if you ever could find a honest and GOOD technician, you’ll be doing yourself a favor because dealers will charge you for things you don’t need, and their labor rates could be $100-$150 an hour, while the side work guy will probably charge you maybe $60 an hour.

And I no longer understand why people are afraid of being screwed over by mechanics, over the past year I’ve been screwed over by carpenters, roofers, gutter cleaners, plumbers. At least when things go bad with a mechanic you can take it back to the place you had the work done...the roofer or carpenter??? you’ll never see those guys again. You won’t even be able to find them. I really should have gone into HVAC or plumbing. I’d give you an honest install or repair, and if I screwed up I’d have so many people waiting in line for me to get to them, that I’d never return a call or fix what I didn’t do right. It’s like forgetting your mistakes and always having people waiting for your business. Construction is a great industry right now if you know what you’re doing (and you know how to change your phone number).
I always moonlighted and never had a problem, when I was young and worked at the dealership the owner actually condoned it with me.
One day he and the service manager came in to the service area and asked if anyone could paint, I said I can. there was a car all masked and ready to go and the body man who did the painting was out sick and it had to be done today.
To make a long story short it came out perfect, glass smooth with no imperfections which was hard to do with the acrylic enamel paints of that time. After that I was painting 2-3 a week at night off the books, I was making good book hours but having the envelope with cash in it once a week made a big difference sometimes it was more than I made on the books.

He let me paint my own side jobs in the booth on weekends for a small fee to use the booth, we were both making money. This was a big dealer not some small fly by night.
Doing it in Germany today (it sort of always was) is a bit dodgy and illegal, "black work" is frowned upon by their IRS and can land you with big fines and even prison. You have to be very careful who you deal with.

Biggest issue I see with side work for pay is liability - real, legal liability. If you fix an engine (regardless of what you repair) and it stalls out for whatever reason, causes an accident of any kind who are the attorneys coming after? Or you replace a shock, ball joint, whatever, and the vehicle is in a wreck? Attorneys are looking at who worked on the vehicle and when.

Doesn't matter what you did, how well you did it, and whether or not it contributed to the accident/wreck - you most likely will be served and will need to defend yourself in court. Forget about any non-business insurance you have - it won't cover for this if you accepted payment.

Why do companies charge so much for work? Yes, of course they need to make a profit to stay in business. But also to pay for insurance, business taxes, income taxes, property taxes, health insurance, employee pay, etc.

With my company, our three biggest expenses in order: Employee pay, taxes (Income, FICA, property, etc), insurance (liability, health, etc). Depending on margins within the specific industry this doesn't leave a lot on the table for the business itself. Just look at the prospectus for any specific company stock and they spell it out right there. Easy to see why things cost what they do, and what potential liability costs all of us.

On several welding forums I read, smaller guys form LLCs, work at "their" company with no liability insurance to cover mistakes or errors (errors/omissions insurance), and when sued declare bankruptcy and move on. I have some acquaintances who paint, and they do the same thing. Close the old business and form a new business when the old one gets sued. Attorneys have no one to pursue. LLC = limited liability company

Anyway, it you want to work on the side, have at it. Just cover your bases or you might be sued for all you have if something goes wrong - even if it's not your fault.
I can see issues with legality due to HOAs and local ordinances. For example, when Infirst got my 2wd Ram, it had a dented up front bumper. I found a good used one from a parts truck and got one of the CL auto techs to come do it.

I could see if these guys came and did bigger/longer jobs and set up on the street that could be an issue,
Especiallly if it was something that was greasy and oily and made a big mess.

I get that taxation and insurance is an issue. The taxation thing could be an individual’s issue, but more on the person selling their work. The insurance could be the hiring party’s issue if the worker gets hurt.

The issue of competing against an employer can be serious business, but easily avoided.
You can fire them for whatever reason you like though...

Thats always been the case. Mechanics and broadcast/ post engineers are alike in this regard.

If you've got a guy regularly beating book time, and showing up reliably, being a good citizen, and can handle clients - you keep him.

There is so much work to be done it doesn't really matter, mechanics had clients pre employment and will have them after.
Probably not illegal but quite possibly immoral. If your boss knows what you’re doing as a side gig and approves or you’re stealing customers without his/her blessing, one’s conscience will let you know which is which.
I imagine dealerships carry a ton of insurance against getting sued and use accredited technicians as part of their defence. If moonlighting, say, replacing a ball joint, if it lets go and the car careens into a semi, there might be a lawsuit.
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Where I work, it says in the handbook that employees are not to compete with the dealer, but it's vague and not really enforced unless it's really taking away business or company materials are used without being billed. Paint in the body shop is the only place I've seen anyone fired over stuff like this.

Even using the shop at work is usually allowed as long as lifts and parking aren't tied up. If someone leaves a side project on a lift and the service director notices, he will probably say to wrap it up, but right now it's generally allowed if it's not causing problems. At times in the past there has been an "everything in the shop must have an open RO" policy, but that usually falls apart pretty quickly.