he might be able to tell me bye-bye from his business for now on, but I would HOPE that this bozo would not think he can search my car because I am his employee. He cannot do this. period.
I think you are confused on the semantics of the situation.
The 'bozo' can and does rightfully believe that he can search your car (assuming this is a condition of employment to which you agree as an employee by acceptance of employment) so long as you are an employee and that there are no laws to the contrary. It is not until you stop being an employee, however, is when 'bozo' can no longer do this.