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Rotors, Resurfacing and the Law: How the Glad/Midas Lawsuit Will Change How You Sell Brakes

February 11, 2010
After a four-year undercover investigation, the California Bureau of Automotive Repair (BAR) has settled the case against Mike Glad, the owner of 22 Midas shops, for charging customers for unnecessary repairs and using deceptive advertising. The $1.8 million settlement also prevents Glad from owning or operating a repair shop in the state.
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The initial lawsuit sought $222 million in civil penalties, costs and reimbursement to customers. As part of the settlement, Midas  acquired all of Glad’s shops for $5.8 million.

In my opinion, this lawsuit has been a black eye for all shops. The true victims in this case are not the consumers, but the honest independent shops and Midas franchisees who now have to face an even more skeptical public.

The 100 page complaint outlining the violations should be required reading for every technician and shop owner. The document describes every sting performed by the BAR  in detail and outlines every customer complaint received. It is by far one of the best training tools  for explaining the laws and giving real life examples of how they are applied. The document is available in PDF format here.

The investigation was performed by undercover inspectors posing as customers with “rigged” vehicles. The typical sting went like this: An undercover investigator would  install new rotors and worn pads that were below specifications. The entire vehicle would be inspected and documented. Rear brakes would also be serviced with brand new pads or shoes and adjusted according to the OE service manual.

The inspector would drive to a shop complaining of either a brake noise or that the brake light was on. During the write-up, the inspector would comment on a banner outside the shop or present a coupon for the $89 lifetime brakes.

None of the undercover inspectors received the pads at the advertised price, although the vehicles involved in the undercover operations should have qualified for the advertised brake specials since the only repairs needed were the replacement of brake pads.

According to the investigation, Glad’s shops sold an average of $290 of unnecessary repairs and services to the undercover inspectors. During every undercover operation (with the exception of one), they were sold  resurfacing of the front brake rotors and/or rear brake drums at a cost between $110 to $130. Also, the undercover investigators were sold needless adjusting of self adjusting brakes and cleaning of the brakes. No shop attempted to sell new rotors.

The California BAR, in my opinion, holds the OEM service information in too much esteem. Some OEM engineers will tell you that many of their service recommendations are to save warranty time (paid by the OEM), this includes the replacement of brake pads and determining if the rotors should be resurfaced. BAR interprets these OE service manuals as Bible and verse.

In my opinion, if the rotors are within specification, a light cut and non-directional finish can provides a finish that can improve the bedding-in process and reduce stopping distances. It can also reduce noise-related comebacks.

Unfortunately, not only did the shops sell resurfacing unnecessarily according to the BAR, they also failed to cut the rotors in the right way and managed to cause lateral runout problems that were not there in the first place in two cases.

If there is one thing you should take away from this incident, it is this: If you get a car in your shop with worn brake pads and the rotors have little or no wear, treat the vehicle with the best possible care. Chances are it is a test. If the customer’s name sounds made up and they pay in cash, be very afraid.

There is a silver lining to this story. This case marks the demise of the advertised ultra-low price brake job from most major chains and new car dealers. From the lawsuit:

"An automotive repair dealer shall not advertise automotive service at a price which is misleading. Price advertising is misleading in circumstances which include, but are not limited to the following: The automotive repair dealer does not intend to sell the advertised service at the advertised price, but intends to entice the consumer into a more costly transaction."

In the past few months, many  national chains have stopped advertising low-price, per-axle specials in fear they might be the next target of an investigation. If you are an independent shop, I would also stop advertising these specials.

Submit a Comment   Comments (32)
Comment by:
Raul
4/14/2010
12:59 AM
This incident is not good. However, I believe this is an opportunity for those of us in the true, honest, independent repair shops to really shine before the eyes of the skeptic yet potential customers.
Comment by:
Auto Doc
4/13/2010
11:50 PM
News Break Guys; Mike Glad has always been a crook and fraud & he makes our industry look bad and this is a good thing BAR has done this time. Unfortunately Mike probably wasn't really hurt that much here....Good Ridens Asshole Mike.
Comment by:
Dale D
4/12/2010
10:27 PM
My experience with the BAR in California has always been a pain in the rear. They hire people who failed to make it in this industry or people who cannot hold a job in the real world - hence they work for a government agency. Sure would like to see a class action law suit from all repair shops to shut bar down for all the mistakes they make too!
Comment by:
Ron Umbarger
3/31/2010
3:22 PM
I believe a sting operation by any government agency is not always in anyone's best interest but it happens. They either have an agenda or nothing better to do. The best way to stay out of their sights is to do what you say you will do. Do not advertise cheap repairs and then try to upsell. Let the customer know up front what your proceedures are and what your warranties cover. Use quality parts (OE or better). Explain everything, twice if you have to. We, independant auto repair shop owners, must operate above everyone's standards. The agency that performed this sting should also bring their agents up to speed on proper repair procedures or perform some of these repairs themselves using their standards and see what happens. I have been in this business over 30 years and if you use inadequate procedures you will get the same in results.
Comment by:
Gary R Thomas
3/30/2010
8:57 AM
I believe this "bust" was a total setup based upon some very thin issues. Were machining rotors, replacing hardware, cleaning and adjusting rears suggested or required repairs? We suggest hardware on any vehicle with 50k+ on it because of all the heat cycles and corrosion it incurs. It also makes for smoother brake operation and less squeals and comebacks. The customer can decline ithe parts if they wish, as it is not "required". These State BAR's are all idiots looking for a reason to keep a job. Granted, there are shops out there that rip people off, but those eventually get weeded out, just like a bad cop will.
Comment by:
Howard Sanders, Owner/Mgr- Full Spectrum Auto Care
3/24/2010
7:11 AM
I have to agree that, although I think the BAR was misguided in some instances on the details, the come on "Brake Special" is not only doing the customer a disservice but also our industry as a whole. I mean does any shop owner or tech not believe,whole heartedly,

that a national &/or regional chains have nothing but the bottom line in mind @ all times; Dealers as well. Does the BAR really not understand that OEM tilts the tables in their favor for any warranty issues; Hell order a fuel pump or radiator for a dealer & have a warranty issue, they will wiggle out of it any way they can by saying for instance the pump failed because you did not install a fuel filter but will quote a customer the job & tell them a filter is not necessary when they are questioned due to the customer getting a quote from an independent shop. We all know that 95%+ of the time that a vehicle coming into the shop for brakes is going to need rotor machining or replacement & that if it is drums in rear they will need clean/adjust + most like a trueing of the drums, also a brake fluid flush. Anybody that thinks you are stealing from the customer or overselling them when you perform an exceptionally complete brake system servicing is misinformed, under trained, or just an idiot. With that being said lets get to the real root cause of the issues here #1- that is flat-rate or commission based pay for techs & managers. I personally pay by hourly or salary & this helps assure I can trust what the tech is telling me because he is not worried about a paycheck. #2- the customers have to start taking some responsiblity for their actions too,i.e.- if you are looking for the lowest price know to man, for what I personally think is one of the most critical repairs on a vehicle, what do you think you are getting? I mean we all know there is no free lunch. But the customers want to believe we are theives & because so many shops do not use the best practices, the rest of us get a real knock; I truely believe this is what keeps our industry from being able to charge appropriately for the amount of tool investment, knowledge, certification & re education that a quality automotive professional must do&/have to be proficient in his or her trade. A good shop would have seen the new rotors & fully adjusted rear brakes( & I am originally for N.California)even though they were not in a rust belt state like mine here in Michigan. It is a real reminder that we must always balance our profit needs with what is true, right & fair to the customer. Also until we all adhere to the best business pratices, @ all times, we will never be fair to ourselves or our employees as an industry. Just one mans opinion but I have to say I do a lot of "Brake

Jobs" for a shop that specializes in Dealer Level Diagnostics & Electrical Troubleshooting!!! ~H~
Comment by:
jim bowditch
3/22/2010
9:41 AM
just a quick note to the BAR. If you think that for one minute that automotive dealers only use their oem brake pads, you need to wake up. You think that if they are out of stock that they are going to makwe their customer wait for who knows how long to get something as critical as brakes fixed. wake up and smell the coffee. I have been in the automotive repair business for over forty years. I am all for being fair to my customers. However I would like to keep those customers also. First of all I would like to make a sugestion to the Bar. Find yourself some seemingly good rotors from any vehicle. Now measure them. Oh no not in just one spot but on the complete surface. Oh yes the measurement will change. Ok now we have a problem. the surfaces are no longer parralell. This means that the brakes are not performing as they should be. this is not your typical as they call it runout. This is the rotor in the shape of a wedge. Thus if you put new pads on with this condition, your pads are now when being applied contacting the rotors unevenly. The only thing that will get rid of this condition is by RESURFACING the rotors, to bring them back to parralell!!!!!!!! Not too hard to understand? If California Bar has any questions please have them e-mail me at micky333@verizon.net. Resurfacing brings the rotors back to parralell again. That is why brake rotor manufactuarers give a specification for discard thickness as well as "machine to" thickness. Maybe the BAR should contact the manufactuares as to why the set these standards of thickness. For safety I do believe. Give the man back his business. And set the idiot that sued him straight on the reason for resurfacing rotors. Rotor resurfacing is a perfectly legitimate service. It helps to create a new bonding surface for new pads and RESURFACED rotor.
Comment by:
Russell Martin
3/19/2010
10:26 PM
The scamming of unreal price advertising is wrong granted but if you don't true up the rotor before before new pads are installed you are going to be re-doing many brake jobs for free because the pads and rotors will overheat before they will seat on the old surface that may only have 50% contact area until pads wears in.. That is what I have learned in 40 years of doing brakes, 31 of them with my own shop..
Comment by:
dr von geepy
3/3/2010
6:38 AM
the problem is your selling work that doesn't need to be done. that is wrong. this is fact not opinion
Comment by:
Bob Johnson
3/3/2010
3:19 AM
All the Bar did was muddy up the water for all the honest brake repair shops.I feel that any customer that thinks a one axle brake service will only cost them those adertised low ball prices, has a Walmart mentality to begin with. As far as not machining Rotors,or if and when they are needing replacement, and the shop chooses not to do either or,( Stupid Hurts )
Comment by:
Disappointed in Politics
3/1/2010
11:47 AM
Mike Glad is one of the true gentleman in this industry. He was "targeted". If the California Bureau of Automotive Repair - Division of Consumer Affairs, followed their mission statement, they would not have conducted a 3 1/2 year investigation. Yet, they would have found some incosistencies to Glad's operation and discussed with Glad. The BAR did NOT attempt to work with Glad, Midas, or the industry, and they ulitmately were not protecting the customer. Jerry Brown is a press hungry politician who needs big splashes in the press to get him to the governership.
Comment by:
ROBERT
2/28/2010
11:17 AM
I know Mike Glad personally and I know he would never condone the practices which are outlined in the complaints. No where is it mentioned that Mike had a "close" 25 year relationship with the BAR in which he repeatedly solicited the BAR for any...I repeat "any" problems which were reported in his or any other Midas shop so that they could be addressed and corrected. I think you will all agree that any large organization will have some "bad actors". I have many unanswered questions regarding this dark episode in the automotive repair market.

Why would the BAR not respond to Mike Glad's solicitations when there was a complaint? For what reason? Why would anyone reccommend service or replacement on "new" rotors or drums on 5 to 10 year old cars? I was not there and all the complaints indicate are 2 or 3 word "sound bites". Are there complete transcripts from tape recordings? Why did the expert evaluations take from 3 days to 2 weeks to accomplish? My experience is that an inspection can be d
Comment by:
Gary Roy (GWR Products)
2/27/2010
11:38 AM




Hi Andrew, thanks for continued support and great articles like this one. As you and I have discussed many tmes, the problem is consistancy in procedure. Everyone has a different opinion on how to do a brake service, from hanging pads to replacing everything with OE new. Until we set up a single acceptable procedure, based on minimum specification limitations, we will have groups like the BAR say we are doing it wrong. After years of testing, teaching and selling OE Approved brake service products (www.StopBrakeNoise.com), we need to get the message out that there is a procedure that properly mates new pads to new or existing rotors. There is no way an existing rotor, that is not turned and honed with a crosshatch pattern, will accept a new pad's film transfer process. The pores in the cast iron need to be open and ready to accept the particles that move over during the first few hundred stops. As you mentioned, there is also a problem with old pad material being different fr
Comment by:
Andrew Markel, Editor, Brake & Front End
2/22/2010
1:37 PM
Wow
Comment by:
Rick Lord
2/14/2010
9:36 AM
Thank's for the insight. The low priced brake service has been around for a long time. I have been in business since 1970 and recall Sear's, Midas and other chains having legal suits filed by States Attorneys for similar practices. I believe the driving factor for these dishonest practices are car counts and sales quotas these companies place on their facilities. They put sales ahead of honest auto repair. These bait & switch practices aren't limited to brakes, as evidenced by marketing of tune-up, tires, mufflers. etc.. The irony I see today is the OE dealer network has started advertising brakes in the same manner as the bait & switch franchises !!!! Thank's again.
Comment by:
donnie
2/13/2010
8:43 PM
as a ase master tech and a toyota master tech for mant years. we at our dealership resurface rotors at every brake job only after mikeing them if not in specs new ones installed. i .feel like they need to have more education in the automotive feild before thay pass judgement. many old school techs were taught to resurface rotors. our price includes oe pads ,resurfacing and labor. BEST THING IS DO WHAT YOU SAY YOU GOING TO DO.IE INSTALL PADS THEN ONLY INSTALL PADS.IF ADDITNOL WORK IS NEED THEN BE UP FRONT SHOW THE CUSTOMER FIRST.
Comment by:
Chuck Greening
2/13/2010
2:04 PM
Andrew, while I understand the cuation of your closing sentence, advertising "special" pricing is not the problem; failing to serve the best interest of the customer is the issue. It is interesting that only a few of the responsible repair facilities ever seem comment on actions like the BAR undertook. How many brake repairs are performed daily using sub-standard parts (rotors, pads) that seem to otherwise meet visual "fit and finish" requirements? The consumer tends to lump the independent aftermarket repair facilities together and unless the industry as a whole decides to make quality a hallmark of the profession of automobile repair, those who are interested in making a quick buck imperil all.
Comment by:
Kyle Lahm
2/13/2010
10:57 AM
Totally agree with Mike Allen. We test drive the vehicle for brake noise and shudder, If it needs rotors it gets new ones. New pads on older rotors we use Squeak Relief to help bed in the new pads. We used to have a ProCut due to being with a manufacturer- and while the oncar lathe does a fantastic job of cutting- 9 out of 10 rotors came back with a shudder because the already skimpy rotors were thinner and eventually warped.
Comment by:
Richard V
2/12/2010
2:26 PM
Interesting...Most places i worked at did not charge for resurfacing rotors/drums however, did is more than just overselling, this sounds like they were just ripping people off!!!! What a black eye to our industry.
Comment by:
allan boggs
2/12/2010
10:14 AM
Glad Midas is NOT the only one doing this type of thing. I had a customer who had a S type Jaguar. It had a Ford Tauras engine and trans which the owner wasn't aware of. Every receipt in the glove box from the Jaguar shop she had for auto repairs was over $1,000.00 or more. Not one was under $1,000.00. It happens all the time. Why did the investigation take four years? How many shop visits took place in those 1,460 days? If it was a government agency not many I'll guess.
Comment by:
Mike
2/12/2010
10:13 AM
Its about time these "cheap" brake jobs get called out. Those who use "bait and switch" pricing tactics need to be out of business. I totally disagree with some of the findings but the ruling statement of using false advertising is and has been a problem in our industry. Time to start treating our industry as a professional one as well as us professionals having a better self image.
Comment by:
Andrew Markel, Editor, Brake & Front End
2/12/2010
10:11 AM
Jerry Haley: I agree, that low speed growl and squeak is actually caused by the friction material on the rotor from the old set of pads interacting with the new friction material. Sometimes the tribology of the two friction materials is incompatible and causes noise problems. It can also cause increased stopping distances. OE service engineers who write the manuals assume that if the pad is replaced at the dealer it is the exact same friction material. In theory, not machining the rotors makes sense. But, once a car is more than three years old it is difficult to make sure that the new friction materials matchs what is on the face of the rotor. Even at this age, the OES pads at the dealer may not be the exact same pad that vehicle had when it was manufactured.
Comment by:
Jerry Haley
2/12/2010
6:45 AM
I own an independent small repair shop and I have put many brake pads on vehicles that looked smooth and very little runout without machining the rotors, well that practice will come back to bite you because of the squeak problem or the low growl as you come to a slow stop. I think the investigators need to know a little more about the everyday problems we face on a daily occurance. Yes they will stop OK but most customers want that smooth and quiet performance.
Comment by:
Phil Sonntag
2/11/2010
7:35 PM
Great article. And great comments. This reminds me of the Purrfect Auto Service franchise 'Fraud the Public' plan. Here in Las Vegas, the Attorney General's office is after 11 PA stores and the founder (Shafik Hirji - please leave this name out of these comments), for the same, if not similar practices. They have videos in addition to witnessed testimonies. More recently, the feds went after 6 PA shops for possible income tax fraud & false reporting. The bottom line is that you're 100% correct. This type of business practice gives us honest shops a bad name. In all the years of doing business, and trying different types of advertising, the best course is to do the job right the first time, professionally, honestly, and for a good & fair price. And then, let your customers do the rest. Tell a friend, word of mouth, is the most sound way of advertising! Thanks for this article.
Comment by:
Chohaan
2/11/2010
5:09 PM
I own a repair shop right near/next to a MIDAS In Oklahoma city and guess what we have won over many of their customers with similar complaints of over charging, they put big banners for $ 99 for brake pads or shoes and hit the customer with un-necessary services. You are right it gives other repair shops a bad name. Make money the honest way & treat the customer as if it is you.
Comment by:
mike allen
2/11/2010
4:55 PM
For years I have been NOT resurfacing brake rotors. If they are in spec and not rusted, they stay on the car. I have had no subsequent runout complaints or noise complaints. If the rotors are bad (scored, warped, etc) they get replaced with the best. I had more trouble with refinished rotors than I ever wanted. Nobody complains. I have never advertised a loss leader brake sale and consider those who do to be less than ethical. I have not read the complaint yet (I will), but it would seem from what I have read in the article that it reflects the sales practices that I have heard many customers complain about. My customers are happy and nobody gets ripped off.
Comment by:
Andrew Markel, Editor, Brake & Front End
2/11/2010
4:41 PM
Bill B: It was amazing when the cited the Brake Align Shims for the 95 Olds for .001" of runout. But what really made me winch was they did not know what a "Pro Cut" on the car brake lathe was on page 21.
Comment by:
Bill B
2/11/2010
4:32 PM
Very interesting, I have always had many bad thoughts about discount brake service. Thats why we never scrimp on parts--only the best at the time. In my opinion one of the best now are the Adaptive One Pads. We always machine the new rotors right out of the box, takes time but,when the vehicle leaves our shop we are sure the client has received 1ST class service.I am pleased to hear that the Chain stores are considering coming back to a level playing field.....HONESTY Ok, I have just read the first 40 or 50 pages of the document.Yes it looks like Midas was wrong and not very honest in some cases but, there is also a bunch of B.S coming from the bureau. It is almost a given that every time you replace pads the rotors are going to be machined, if not there going to squeek. Who cares what the 1995 or 1993 GM repair manuel says. These people who are investigating are not being truthfull either in my opinion.Watch your back and treat every customer the way you wish to be treated. BB
Comment by:
Andrew Markel, Editor, Brake & Front End
2/11/2010
3:15 PM
I plan to reprint segments in the March issue. I still can't believe they spent four years on the investigation.
Comment by:
Alpio Barbara
2/11/2010
3:14 PM
Great article.. you are correct.. this gives all of us a black eye.. we need to get rid of this type of owners in our field of business.. again Thank you
Comment by:
Denny Holt
2/11/2010
3:12 PM
I always make sure to tell my students both sides of the story when working on a customer's car. This story makes me think of the customer stand point which is,, These shops are really scamming people by selling them resurfacing jobs. The technician’s standpoint and I did not personally get a chance to inspect, I want to make sure there is no runout, and the rotor is perfect. BECAUSE... No matter what happens to the brakes, the customer is going to hold me responsible. Even after I explain the actual cause, he/she may have a problem trusting me next time....If there is a next time.
Comment by:
Gonzo
2/11/2010
1:31 PM
Great article Andrew... Are you going to publish that 100 page complaint found at BAR you found?? I'm reading it now..
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