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                                                                   EXHIBIT 10.3


                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT is made and entered into as of the 23rd day
of February, 2000, by and between THOMAS M. DUFFY ("Employee") and ALLIED
HOLDINGS, INC., a Georgia corporation ("Employer").

                                  WITNESSETH

         WHEREAS, Employer, through its Affiliates (as hereinafter defined), is
engaged in the transportation of automobiles and light trucks from
manufacturers to retailers, and other related activities (the "Business"); and

         WHEREAS, Employee has practiced law for a number of years, has
pertinent legal experience, and has, from time to time, provided legal services
to Employer; and

         WHEREAS, Employer desires in-house legal counsel and Employee desires
to serve as Employer's in-house legal counsel; and

         WHEREAS, Employer and Employee have made and entered into a previous
employment agreement; and

         WHEREAS, Employer and Employee deem it in their respective best
interests to clarify the duties and obligations, each to the other, by
executing this new Employment Agreement,

         NOW, THEREFORE, for and in consideration of the covenants and
conditions hereinafter set forth, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Employer and
Employee hereby mutually agree that all previous employment agreements are
superseded, null, void, and of no further force and effect, and Employer and
Employee further mutually agree as follows:

         1.       DEFINITIONS.

                  (a)      "Affiliate" means any corporation, partnership or
                           other entity of which Employer owns at least eighty
                           percent (80%) of the outstanding equity and voting
                           rights directly or indirectly through any other
                           corporation, partnership or other entity.

                  (b)      "Base Salary" means the annual salary payable
                           pursuant to Paragraph 4(a) hereof as adjusted, from
                           time to time, by Employer.

                  (c)      "Cause" means (i) the commission by Employee of an
                           act constituting a felony and Employee's conviction
                           thereof; (ii) Employee's prolonged absence, without
                           the consent of Employer, other than as a result of
                           Employee's Disability or permitted absence or
                           vacation; (iii) conduct of Employee which amounts to
                           fraud, dishonesty, gross or willful neglect of


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                           duties; or (iv) engaging in activities prohibited by
                           Paragraphs 13, 14, or 15 hereof.

                  (d)      "Disability" shall conclusively be deemed to have
                           occurred with respect to Employee (i) if Employee
                           shall be receiving payments pursuant to a policy of
                           long-term disability income insurance; (ii) if
                           Employee shall have no long-term disability income
                           coverage then in force and any insurance company
                           insuring Employee's life shall agree to waive the
                           premiums due on such policy pursuant to a long-term
                           disability waiver of premium provision in the
                           contract of life insurance; or (iii) if Employee
                           shall have no long-term disability waiver of premium
                           provision in any contract of life insurance, then if
                           Employee shall be receiving long-term disability
                           benefits from or through the Social Security
                           Administration; provided, however, that in the event
                           Employee's disability shall, otherwise and in good
                           faith, come into question (and, for purposes of this
                           proviso, "disability" shall mean the permanent and
                           continuous inability of Employee to perform
                           substantially all of the duties being performed
                           immediately prior to his disability coming into
                           question), and a dispute shall arise with respect
                           thereto, then Employee (or his personal
                           representatives) shall appoint a medical doctor,
                           Employer shall appoint a medical doctor, and said
                           two (2) doctors shall, in turn, appoint a third
                           party medical doctor who shall examine Employee to
                           determine the question of disability and whose
                           determination shall be binding upon all parties to
                           this Agreement.

                  (e)      "Restricted Period" means the period commencing as
                           of the date hereof and ending on that date one (1)
                           year after the termination of Employee's employment
                           with Employer for any reason, whether voluntary or
                           involuntary.

                  (f)      "Term" means the Initial Term and any Renewal Term
                           (each as defined in Paragraph 2 hereof); provided,
                           however, that, in the event Employee's employment
                           shall terminate by reason of the applicability of
                           Paragraph 8 hereof then, in such event, the "Term"
                           shall end upon the termination of Employee's
                           employment.

         2.       TERM. Subject to the provisions hereinafter set forth, the
Term of this Agreement shall commence as of the date hereof and shall end on
December 31, 2001 (the "Initial Term"). Upon the expiration of the Initial
Term, and on the expiration of each successive Renewal Term (as hereinafter
defined), Employee's employment shall be automatically renewed for an
additional term of one (1) years (the "Renewal Term(s)"), unless written
notification of termination is given by either party to the other party not
less than three (3) months prior to the expiration of the Initial Term or, as
the case may be, the then-current Renewal Term.


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         3.       DUTIES.

                  (a)      Employee shall, during the Term, serve as
                           "Vice-President, Corporate Affairs and General
                           Counsel." Employee's principal duties shall be to
                           (1) act as legal counsel to Employer and (2) perform
                           such executive, managerial and administrative duties
                           as the Chairman and Board of Directors of Employer
                           may, from time to time, reasonably request and which
                           shall not be inconsistent or incompatible with
                           Employee's role as legal counsel.

                           ANY IMPLICATION ANYWHERE IN THIS AGREEMENT TO THE
                           CONTRARY NOTWITHSTANDING, EMPLOYER AND EMPLOYEE
                           RECOGNIZE THAT, AS A MEMBER OF THE STATE BAR OF
                           GEORGIA, EMPLOYEE SHALL, AT ALL TIMES, (I) BE BOUND
                           BY AND ACT IN ACCORDANCE WITH THE RULES, REGULATIONS
                           AND POLICIES OF THE STATE BAR OF GEORGIA, INCLUDING
                           WITHOUT LIMITATION THE CANONS OF ETHICS AND
                           STANDARDS OF CONDUCT, AS FROM TIME TO TIME
                           PROMULGATED AND/OR AMENDED, AND (II) ACT IN SUCH
                           MANNER AS TO PROTECT THE ATTORNEY-CLIENT PRIVILEGE
                           BETWEEN HIM AND EMPLOYER UNLESS EMPLOYER SHALL
                           SPECIFICALLY CONSENT, IN A WRITING SIGNED BY THE
                           CHAIRMAN OR PRESIDENT OF EMPLOYER, TO THE WAIVER OF
                           SUCH PRIVILEGE. IN NO EVENT SHALL EMPLOYEE'S
                           EMPLOYMENT BE TERMINATED, NOR SHALL EMPLOYEE BE
                           DEEMED TO BE IN BREACH OF THIS AGREEMENT, BY REASON
                           OF ANY ACTION OR DECISION TAKEN BY HIM IN GOOD FAITH
                           WHILE ACTING PURSUANT TO AND IN ACCORDANCE WITH THE
                           PRECEDING SENTENCE.

                  (b)      Subject to the preceding subparagraph, during the
                           Term, Employee shall devote substantially all of his
                           time, energy and skill to performing the duties of
                           his employment (vacations as provided hereunder and
                           reasonable absences because of illness excepted),
                           shall faithfully and industriously perform such
                           duties, and shall use his best efforts to follow and
                           implement all management policies and decisions of
                           Employer. Employee shall not become personally
                           involved in the management or operations of any
                           other company, partnership, proprietorship or other
                           entity, other than any Affiliate, without the prior
                           written consent of Employer; provided, however, that
                           so long as it does not interfere with Employee's
                           employment hereunder, Employee may, with Employer's
                           consent, (1) serve as a director, officer or partner
                           in a company that does not compete with the Business
                           of Employer and the Affiliates so long as the
                           aggregate amount of time spent by Employee in all
                           such capacities shall not exceed twenty (20) hours
                           per month, and (2) serve as an officer or director
                           of, or otherwise participate in, educational,
                           welfare, social, religious, civic, trade and
                           industry-related organizations.


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         4.       BASE SALARY.

                  (a)      For and in consideration of the services to be
                           rendered by Employee pursuant to this Agreement,
                           Employer shall pay to Employee, for each year during
                           the Term, an annual salary of Two Hundred Thousand
                           Dollars ($200,000.00), payable in equal semi-monthly
                           installments in accordance with Employer's payroll
                           practices. Employee's salary shall be reviewed by
                           the Board of Directors of Employer annually and, in
                           the sole discretion of the Board of Directors, may
                           be increased, but not decreased.

                  (b)      In addition to the Base Salary paid to Employee
                           pursuant to Paragraph 4(a) hereof, Employee shall be
                           eligible to receive monthly compensation of up to
                           (x) 3% of (y) Employee's Base Salary multiplied by
                           one-twelfth (1/12), through Employer's anticipated
                           "Monthly R+" performance incentive plan, as such
                           plan shall be developed, implemented and maintained
                           from time to time by Employer. The pertinent terms
                           of the plan and the specific performance objectives
                           to be developed to measure Employee's performance
                           under such plan shall be provided to Employee at
                           such time as Employer shall have implemented the
                           same. This Paragraph 4(b) shall not create any
                           entitlement for Employee, require Employer to
                           actually implement the Monthly R+ plan or prevent
                           Employer from, in its sole and exclusive discretion,
                           terminating or changing the terms to any such plan
                           Employer does so implement.

         5.       BONUS COMPENSATION. Employee shall, with respect to each
calendar year of Employer ending during the Term, be entitled to participate in
the Allied Holdings, Inc. EVA Based Incentive Plan, as the same may be from
time to time amended and in effect (the "EVA Plan"). The Employee's Target
Bonus for purposes of the EVA Plan shall be such percentage of Employee's Base
Salary as shall, from time to time, be determined by Employer. Employee's
actual bonus shall be calculated in accordance with the terms of the EVA Plan.
Employee shall be provided with a copy of the EVA Plan within thirty (30) days
of execution of this Agreement.

         6.       OTHER BENEFITS. During the Term, Employer shall provide the
following benefits to Employee:

                  (a)      Employee shall be entitled to participate in all
                           group medical and hospitalization benefit programs,
                           dental care, sick leave, life insurance or other
                           benefit plans for highly compensated employees of
                           Employer or any Affiliate as are now or hereafter
                           provided by Employer or any Affiliate, in each case
                           in accordance with the terms and conditions of each
                           such plan and benefit package.

                  (b)      Employee shall be entitled to participate in all
                           long term incentive plans, stock option plans and
                           other similar plans for highly compensated employees
                           of Employer as are now or hereafter provided by
                           Employer or


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                           any Affiliate, in each case in accordance with the
                           terms and conditions of each such plan.

                  (c)      Employee shall be provided with the use of an
                           automobile, which shall be comparable to other
                           automobiles Employer provides to persons serving in
                           the capacity of Vice-President of Employer, or
                           President of an Affiliate, and which shall be chosen
                           by Employee from a list of automobiles Employer
                           typically makes available to its Vice-Presidents and
                           Presidents of its Affiliates and Employer shall pay
                           for the cost of all insurance, ad valorem taxes and
                           tag charges for such automobile and all operating
                           and maintenance charges for such automobile. In
                           addition, Employee shall be entitled to an
                           automobile allowance for his spouse comparable to
                           the spousal allowance Employer provides to persons
                           serving in the capacity of Vice-President of
                           Employer, or President of an Affiliate, as
                           determined from time to time by the Board of
                           Directors of Employer.

                  (d)      Employee shall be provided with the use of a
                           cellular telephone, at no cost to Employee.

                  (e)      Employer shall reimburse Employee for dues paid by
                           Employee for membership in such professional
                           organizations and eating clubs as shall, from time
                           to time, be deemed appropriate and necessary by
                           Employer.

                  (f)      Employee shall, at all times, have available to him
                           an expense account, including the use of a corporate
                           American Express card, to defray ordinary and
                           necessary business expenses incurred in the
                           performance of his duties hereunder. Employee shall
                           be reimbursed for such expenses upon presentation
                           and approval of expense statements or written
                           vouchers or other supporting documents as may be
                           reasonably requested in advance by Employer, which
                           approval shall not be unreasonably withheld or
                           delayed.

         The benefits described in subparagraph (a) of this Paragraph shall not
be construed to require Employer to establish any such plans or programs or to
prevent Employer from modifying or terminating any such plans or programs, and
no such action or failure thereof shall affect this Agreement; provided,
however, that in the event of any reduction in the group medical and
hospitalization benefits in place as of the date hereof, the salary payable to
Employee shall be increased, as of the effective date of such reduction, by
that amount necessary to enable Employee to supplement the benefits provided by
Employer to maintain the level of benefits currently provided to him by it.

         7.       VACATION. Employee shall receive no fewer than three (3)
weeks of paid vacation for each year during the Term. Scheduling of vacation
shall be subject to the prior approval of Employer (which approval shall not be
unreasonably withheld). Vacation time shall not accrue, and in the event
Employee prior to the end of any year shall not use all of his vacation time
for such year, such vacation time shall be forfeited.


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         8.       TERMINATION. Anything herein to the contrary notwithstanding,
Employee's employment hereunder shall terminate upon the first to occur of any
of the following events:

                  (a)      Employee's Disability;

                  (b)      Employee's death;

                  (c)      Employee's materially breaching this Agreement by
                           the non-performance or non-observance of any
                           material term or condition of this Agreement, which
                           breach shall not be corrected within forty-five (45)
                           days after receipt of written notice of same from
                           Employer;

                  (d)      Employer's sending Employee written notice
                           terminating his employment hereunder prior to the
                           expiration of the Initial Term or any Renewal Term
                           in accordance with Paragraph 2 hereof;

                  (e)      Employee's voluntarily terminating his employment
                           hereunder prior to the expiration of the Initial
                           Term or any Renewal Term; or

                  (f)      Employee's being terminated for Cause.

         9.       TERMINATION PAYMENT. Subject to the provisions of Paragraph
12 hereof, in the event

                  (a)      Employee's employment shall terminate pursuant to
                           Paragraph 8(a) (Disability) or Paragraph 8(b)
                           (death) hereof; or

                  (b)      Employee shall terminate his employment as a result
                           of

                           (i)      any failure to elect or reelect or to
                                    appoint or reappoint Employee to the
                                    position of Vice-President, Corporate
                                    Affairs and General Counsel of Employer
                                    unless agreed to by Employee;

                           (ii)     any material change by Employer in
                                    Employee's function, duties,
                                    responsibility, importance, or scope from
                                    the position and attributes thereof
                                    described in Paragraph 3 hereof unless
                                    agreed to by Employee, or any change in
                                    location of the principal offices of
                                    Employer outside the metropolitan Atlanta,
                                    Georgia, area, or any requirement that
                                    Employee perform substantially all of his
                                    duties outside the metropolitan Atlanta,
                                    Georgia, area (and any such material change
                                    or relocation of Employer or Employee shall
                                    be deemed a continuing breach of this
                                    Agreement);


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                           (iii)    the liquidation, dissolution, consolidation
                                    or merger of Employer (other than a merger
                                    or other combination of Employer and an
                                    Affiliate); provided, however, that if
                                    there shall be a termination of employment
                                    resulting from events described in this
                                    subsection (iii) and in subsection (d)
                                    below, then such termination shall be
                                    deemed to fall within the terms of
                                    subsection (d) below which shall control
                                    and be paramount;

                           (iv)     any other material breach of this Agreement
                                    by Employer which shall not be cured within
                                    thirty (30) days after receipt of written
                                    notice of same from Employee;

                           (v)      Employer filing a petition for protection
                                    or relief from creditors under the federal
                                    bankruptcy law, or any petition shall be
                                    filed against Employer under the federal
                                    bankruptcy law, or shall admit in writing
                                    its inability to pay its debts or shall
                                    make an assignment for the benefit of
                                    creditors, or a petition or application for
                                    the appointment of a receiver or liquidator
                                    or custodian of Employer is filed, or
                                    Employer shall seek a composition with
                                    creditors; or

                  (c)      Employee's employment shall be terminated by
                           Employer for any reason other than for Cause or
                           because Employer elects not to extend this Agreement
                           beyond the Initial or any Renewal Term; or

                  (d)      If (i) Employer undergoes any change in control or
                           ownership whereby Employer is reorganized, merged,
                           or consolidated with one or more corporations as a
                           result of which the owners of all of the outstanding
                           shares of common stock immediately prior to such
                           reorganization, merger or consolidation own in the
                           aggregate less than seventy percent (70%) of the
                           outstanding shares of common stock of the Employer
                           or any other entity into which Employer shall be
                           merged or consolidated immediately following the
                           consummation thereof (hereinafter, "Employer's
                           successor-in-interest"), or (ii) the sale, transfer
                           or other disposition of all or substantially all of
                           the assets or more than thirty percent (30%) of the
                           then outstanding shares of common stock of Employer
                           is effectuated, other than as a result of a merger
                           or other combination of Employer and an Affiliate,
                           or (iii) the acquisition by any "person" as used for
                           purposes of Section 13(d) or 14(d) of the Securities
                           Exchange Act of 1934 of beneficial ownership (within
                           the meaning of Rule 13d-3 promulgated under the
                           Exchange Act) of twenty percent (20%) or more of the
                           combined voting power of Employer's then outstanding
                           voting securities is effectuated; or (iv) the
                           individuals who, as of the date of execution of this
                           Agreement, are members of the Board of Directors
                           (the "incumbent Board") cease for any reason to
                           constitute at least two-thirds (2/3) of the Board;
                           provided, however, that if the election, or
                           nomination for election


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                           by the shareholders of any new director was approved
                           by a vote of at least two-thirds (2/3) of the
                           incumbent Board, such new director shall, for
                           purposes of this Agreement, be considered as a
                           member of the incumbent Board, and (a) Employee's
                           employment with Employer or Employer's
                           successor-in-interest is terminated by Employer or
                           Employer's successor-in-interest (as the case may
                           be) or Employee for any reason, or (b) Employee's
                           employment under this Agreement is not extended by
                           Employer or Employer's successor-in-interest for any
                           Renewal Term, and such termination or non-renewal
                           occurs within two (2) years after the closing of the
                           transaction which resulted in the change in control,

then Employer shall, depending upon the reason for the termination of
Employee's employment, immediately pay in cash to Employee an amount determined
as follows:

         (x)      If the termination shall be pursuant to subparagraph (d)
                  above, the amount shall be equal to the sum of

                  (1)      three hundred percent (300%) of Employee's
                           then-effective annual Base Salary; and

                  (2)      three hundred percent (300%) of Employee's
                           then-effective Bonus, as hereinafter defined.

         In addition, Employer shall continue to provide to Employee (except in
         the case of Employee's death), for a period of three (3) years from
         said termination, the benefits enumerated in Paragraph 6(a) and
         Paragraph 6(c) hereof.

         (y)      If the termination shall be other than pursuant to
                  subparagraph (d) above, the amount shall be equal to the sum
                  of

                  (1)      two hundred percent (200%) of Employee's
                           then-effective annual Base Salary; and

                  (2)      two hundred percent (200%) of Employee's
                           then-effective Bonus, as hereinafter defined.

         In addition, Employer shall continue to provide to Employee (except in
         the case of Employee's death), for a period of two (2) years from said
         termination, the benefits enumerated in Paragraph 6(a) and Paragraph
         6(c) hereof.

         10.      OPERATIVE PROVISIONS.

                  (a)      As used in this Agreement, the term "Bonus" shall
                           mean:


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                           (i)      with respect to the most recent grant or
                                    award of restricted stock, pursuant to
                                    Employer's "Long Term Incentive Plan", made
                                    prior to the date of termination of
                                    Employee's employment, the Dollar value, as
                                    of the date of such grant or award, of the
                                    Long Term Incentive Plan restricted stock
                                    plan target for Employee as approved by the
                                    Compensation Committee of Employer's Board
                                    of Directors, which Dollar value is
                                    established by the Compensation Committee
                                    notwithstanding the number of shares
                                    actually received pursuant to such grant or
                                    award and notwithstanding the value of such
                                    shares actually received; plus

                           (ii)     the highest of (1) the average of the EVA
                                    bonuses actually paid to Employee for the
                                    two (2) years immediately preceding the
                                    year in which termination of employment
                                    occurs; (2) the average of the EVA bonuses
                                    which would have been paid to Employee for
                                    the two (2) years immediately preceding the
                                    year in which termination of employment
                                    occurs, assuming his EVA target bonus had
                                    been achieved for each such year; or (3)
                                    the amount of the EVA target bonus for
                                    Employee for the year in which termination
                                    of employment occurs.

                  (b)      In the event of a termination of employment pursuant
                           to Paragraph 9 hereof, all restricted stock awards
                           of Employee shall become wholly unrestricted and all
                           unvested stock options of Employee shall become
                           fully vested in Employee, and all such agreements
                           pertaining thereto shall be read accordingly;
                           provided, however, that Employee shall not have any
                           such rights with respect to any stock issued under
                           any employee stock plan of Employer qualifying under
                           Section 402(a) et seq. of the Code if, and to the
                           extent, such rights would jeopardize the
                           qualification of such plan under said Section. As
                           used in the preceding sentence, "Code" means the
                           Internal Revenue Code of 1986 as amended from time
                           to time or any provisions from time to time enacted
                           and corresponding in substance thereto.

                  (c)      Paragraph 9 and this Paragraph 10 shall survive the
                           termination of this Agreement, and this Agreement
                           shall be read accordingly.

         11.      INTENTION OF PARTIES. It is the express understanding and
intention of Employer and Employee that the provisions of Paragraph 5 and
Paragraph 9 hereof shall be read together and be non-exclusive so that, in the
event of a termination of Employee's employment pursuant to Paragraph 9 of this
Employment Agreement, Employee shall receive both (i) all of the compensation
specified in Paragraph 9 hereof (including, but not limited to, the applicable
percentage of Employee's then-effective Base Salary and the applicable
percentage of the cash portion of Employee's Bonus) and (ii) one hundred
percent (100%) of the pro rata portion of


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both the cash and equity parts of Employee's Bonus based on the number of days
in the fiscal year falling within the Term (which shall include the amount of
any EVA bonus paid to Employee during that year, if any), but in no event shall
such pro rata portion be less than the pro rata share of the highest of (i) the
average of the EVA bonuses actually paid to Employee for the two (2) years
immediately preceding the year in which termination of employment occurs; (ii)
the average of the EVA bonuses which would have been paid to Employee for the
two (2) years immediately preceding the year in which termination of employment
occurs, assuming his EVA target bonus had been achieved for each such year; or
(iii) the amount of the EVA target bonus for Employee for the year in which
termination of employment occurs. The amounts referred to in this Paragraph are
in addition to the benefits enumerated in Paragraphs 6(b) and 6(c) hereof.

         12.      CONDITIONS TO BENEFITS. Anything in this Agreement to the
contrary notwithstanding:

                  (a)      To receive the benefits enumerated in Paragraph 9
                           hereof, Employee shall execute and agree to be bound
                           by a release agreement substantially in the form
                           attached to this Agreement as Exhibit A and, to the
                           extent applicable, a resignation letter
                           substantially in the form attached as Exhibit B,
                           prior to, and as a condition to, receiving any
                           payments or benefits provided for in Paragraph 9
                           hereof or otherwise following termination of his
                           employment hereunder [and, if applicable, the
                           release agreement may contain provisions required by
                           federal, state or local law (e.g., the Older
                           Worker's Benefit Protection Act) to effect a general
                           release of all claims].

                  (b)      Employee's right to receive any of the benefits
                           provided for in Paragraph 9 or otherwise in this
                           Agreement following termination of his employment
                           hereunder shall immediately cease and be of no
                           further force or effect if Employee violates any of
                           the covenants contained in Paragraphs 13, 14, 15 or
                           16 hereof.

         13.      COVENANT NOT-TO-DISCLOSE. Employer and Employee recognize
that, during the course of Employee's term of employment with Employer pursuant
to this Agreement, Employer will disclose to Employee information concerning
Employer and the Affiliates, their products, their customers, their services,
their trade secrets, their proprietary information and other information
concerning their business all of which constitute valuable assets of Employer
and the Affiliates. Employer and Employee further acknowledge that Employer
has, and will, invest considerable amounts of time, effort and corporate
resources in developing such valuable assets and that disclosure by Employee of
such assets to the public shall cause irreparable harm, damage and loss to
Employer and the Affiliates.

                  (a)      To protect these assets, Employee agrees that he
                           shall not, during the Restricted Period, advise or
                           disclose to any person, corporation, firm,
                           partnership or other entity whatsoever (except
                           Employer or an Affiliate), or any officer, director,
                           stockholder, partner or associate of any such
                           corporation, firm, partnership or entity any
                           information received from


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<PAGE>


                           Employer by Employee during the course of Employee's
                           association with Employer relating to the business
                           affairs of Employer and the Affiliates including
                           information concerning Employer's and the
                           Affiliates' finances, services, customers, customer
                           lists, prospective customers, staff, contemplated
                           acquisitions (whether of business or assets), ideas,
                           proprietary information, methods, marketing
                           investigations, surveys, research and any other
                           information relating to the business and objectives
                           of Employer and the Affiliates, except as permitted
                           by Exhibit C hereof.

                  (b)      Employee further agrees that he shall not, during
                           the term of his employment or any time thereafter,
                           advise or disclose to any person or entity any trade
                           secret which Employer or any Affiliate has disclosed
                           to Employee during the course of his employment with
                           Employer.

                  (c)      In the event Employee's employment is terminated,
                           Employee agrees that, if requested by Employer, he
                           will acknowledge in writing that he received the
                           disclosures referred to herein and is under the
                           obligations referred to in this Agreement.

                  (d)      This Paragraph 13 shall, except as otherwise
                           provided in this Agreement, survive the termination
                           of this Agreement.

         14.      COVENANT NOT-TO-INDUCE. Employee covenants and agrees that
during the Restricted Period, he will not, directly or indirectly, on his own
behalf or in the service or on behalf of others, hire, solicit, take away or
attempt to hire, solicit or take away any employee or other personnel of
Employer and the Affiliates. This Paragraph 14 shall, except as otherwise
provided in this Agreement, survive the termination of this Agreement.

         15.      COVENANT OF NON-DISPARAGEMENT AND COOPERATION. Employee
agrees that he shall not at any time during or following the term of this
Agreement make any remarks disparaging the conduct or character of Employer or
the Affiliates or any of Employer's or the Affiliates' current or former
agents, employees, officers, directors, successors or assigns (collectively the
"Related Companies"). In addition, Employee agrees to cooperate with the
Related Companies, at no extra cost, in any litigation or administrative
proceedings (e.g., EEOC charges) involving any matters with which Employee was
involved during Employee's employment with Employer. Employer shall reimburse
Employee for travel expenses approved by Employer or the Affiliates incurred in
providing such assistance. This Paragraph 15 shall survive the termination of
this Agreement.

         16.      COVENANT NOT-TO-COMPETE. Employer and Employee acknowledge
that, by virtue of Employee's responsibilities and authority, he shall, during
the course of his Employment, be instrumental in developing, and shall receive,
highly confidential information concerning Employer, its customers, its
services, its trade secrets, its proprietary information and other information
concerning the business of transporting automobiles and light trucks from the
manufacturer to retailers (and related activities) and the logistics business
in connection with


                                      11
<PAGE>


automobiles and light trucks (all of which is, collectively, referred to as the
"Business"), much of which will be unavailable to those in positions of lesser
responsibility and authority. Employee further acknowledges that the ability of
such information to benefit a competitor or potential competitor of Employer
and the Affiliates shall cause irreparable harm, damage and loss to Employer
and the Affiliates. To protect Employer from Employee's using or exploiting
this information, Employee agrees that, if the employment relationship between
Employee and Employer terminates for any reason whatsoever, then, in such
event, for a period of one (1) year or, in the case of Employee's termination
pursuant to Paragraph 9(d) hereof, two (2) years from the date of Employee's
termination of employment, Employee shall not serve as general counsel or in a
similar capacity for any other person or entity who engages in the Business in
the United States, Canada, Mexico, Brazil, Argentina, the United Kingdom or
South Africa (collectively, the "Restricted Territory"), and Employee shall not
directly or indirectly, own, manage, join, control, contract with, be employed
by, act in the capacity of an officer, director, trustee, shareholder or
partner or consultant, or participate in any manner in the ownership,
management, operation, or control of any business or person engaged in the
Business in the Restricted Territory; provided, however, Employee shall be
permitted to own not more than five percent (5%) of the stock of a corporation
required to file reports pursuant to the Securities Exchange Act of 1934. As to
the foregoing, Employee acknowledges that he has the ability to earn a
comparable income within or without the Restricted Territory as an attorney for
persons or entities not engaged in the Business and that earning a livelihood
for clients not engaged in the Business within or without the Restricted
Territory would not constitute a hardship or an unreasonable restriction on the
Employee or restrict him from earning comparable income. This Paragraph 16
shall survive the termination of this Agreement.

         17.      SPECIFIC ENFORCEMENT. Employer and Employee expressly agree
that a violation of the covenants not-to-disclose, not-to-induce,
not-to-disparage and not-to-compete contained in Paragraphs 13, 14, 15 and 16
hereof, or any provision thereof, shall cause irreparable injury to Employer
and that, accordingly, Employer shall be entitled, in addition to any other
rights and remedies it may have at law or in equity, to an injunction enjoining
and restraining Employee from doing or continuing to do any such act and any
other violation or threatened violation of said Paragraphs 13, 14, 15 and 16
hereof.

         18.      SEVERABILITY. In the event any provision of this Agreement
shall be found to be void, the remaining provisions of this Agreement shall
nevertheless be binding with the same effect as though the void part were
deleted; provided, however, if Paragraphs 13, 14, 15 and 16 hereof shall be
declared invalid, in whole or in part, Employee shall execute, as soon as
possible, a supplemental agreement with Employer, granting Employer, to the
extent legally possible, the protection afforded by said Paragraphs. It is
expressly understood and agreed by the parties hereto that Employer shall not
be barred from enforcing the restrictive covenants contained in each of
Paragraphs 13, 14, 15 and 16 as each are separate and distinct, so that the
invalidity of any one or more of said covenants shall not affect the
enforceability and validity of the other covenants.


                                      12
<PAGE>


         19.      INCOME TAX WITHHOLDING. Employer or any other payor may
withhold from any compensation or benefits payable under this Agreement such
Federal, State, City or other taxes as shall be required pursuant to any law or
governmental regulation or ruling.

         20.      OTHER TAX CONSIDERATIONS. Notwithstanding any other provision
of this Agreement to the contrary, in the event that any payment or benefit
received or to be received by Employee is triggered by an event described in
subparagraph (d) of Paragraph 9 of this Agreement, whether such payment or
benefit is pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with Employer or any Affiliate of Employer
(hereinafter, all such payments and benefits being sometimes referred to as
"Total Payments"), and would not be deductible, either in whole or in part, by
Employer or an Affiliate making such payment or providing such benefit as a
result of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), then, to the extent necessary to make such portion of the Total
Payments deductible (and after taking into account any reduction in the Total
Payments provided by reason of Section 280G of the Code in any such other plan,
arrangement or agreement), (A) the cash portion of the Total Payments provided
in this Paragraph 20 shall first be reduced (if necessary, to zero (0)), and
(B) all other non-cash Total Payments under this Paragraph 20 shall next be
reduced (if necessary, to zero (0)); provided, however, that the Employee's
payment shall only be reduced by this Paragraph 20 if Employer determines that
reducing the Total Payments would result in greater after-tax proceeds to the
Employee than if no such reduction in Total Payments had occurred. Any
determination required by the preceding sentence shall be made by independent
certified public accountants or tax counsel (hereinafter, such party shall
sometimes be hereinafter referred to as the "Independent Adviser") selected by
Employer, the selection of which shall be reasonably acceptable to Employee. In
making Employer's determination as to the application and effect of this
Paragraph 20 on any payments or benefits received or to be received by
Employee, (i) no portion of the Total Payments shall be taken into account
which in the opinion of the Independent Adviser does not constitute a
"parachute payment" within the meaning of Section 280G(b)(2) of the Code,
including by reason of Section 280G(b)(4)(A) of the Code; (ii) those Total
Payments provided under this Paragraph 20 shall be reduced only to the extent
necessary so that the Total Payments (other than those referred to in clause
(i)) in their entirety constitute reasonable compensation for services actually
rendered within the meaning of Section 280G(b)(4)(B) of the Code or are
otherwise not subject to disallowance as deductions, in the opinion of the
Independent Adviser; and (iii) the value of any non-cash benefit or any
deferred payment or benefit included in the Total Payments shall be determined
by the Company's independent certified public accountants in accordance with
the principles of Sections 280G(d)(3) and (4) of the Code.

         21.      WAIVER. The waiver of a breach of any term of this Agreement
by any of the parties hereto shall not operate or be construed as a waiver by
such party of the breach of any other term of this Agreement or as a waiver of
a subsequent breach of the same term of this Agreement.


                                      13
<PAGE>


         22.      RIGHTS AND LIABILITIES UPON NOTICE OF TERMINATION. As soon as
notice of termination of this Agreement is given, Employee shall immediately
cease contact with all customers of Employer and shall forthwith surrender to
Employer all customer lists, documents and other property of Employer then in
his possession, compliance with which shall not be deemed to be a breach of
this Agreement by Employee. Pending the surrender of all such customer lists,
documents and other property to Employer, Employer may hold in abeyance any
payments due Employee pursuant to this Agreement.

         23.      ASSIGNMENT.

                  (a)      Employee shall not assign, transfer or convey this
                           Agreement, or in any way encumber the compensation
                           or other benefits payable to him hereunder, except
                           with the prior written consent of Employer or upon
                           Employee's death.

                  (b)      The covenants, terms and provisions set forth herein
                           shall be binding upon and shall inure to the benefit
                           of, and be enforceable by, Employer and its
                           successors and assigns.

         24.      NOTICES. All notices required herein shall be in writing and
shall be deemed to have been given when delivered personally or when deposited
in the U.S. Mail, certified or registered, postage prepaid, return receipt
requested, addressed as follows, to wit:

                  If to Employer at:

                           160 Clairemont Avenue
                           Suite 200
                           Decatur, Georgia  30030

                  With a copy to:

                           Cohen Pollock Merlin Axelrod & Tanenbaum, P.C.
                           2100 RiverEdge Parkway
                           Suite 300
                           Atlanta, Georgia 30328-4656
                           Attn:  Elliott Cohen, Esquire

                  If to Employee at:

                           2416 Hyde Manor Drive
                           Atlanta, Georgia 30327

or at such other addresses as may, from time to time, be furnished to Employer
by Employee, or by Employer to Employee on the terms of this Paragraph.

         25.      BINDING EFFECT. This Agreement shall be binding on the
parties hereto and on their respective heirs, administrators, executors,
successors and permitted assigns.


                                      14
<PAGE>


         26.      ENFORCEABILITY. This Agreement contains the entire
understanding of the parties and may be altered, amended or modified only by a
writing executed by both of the parties hereto. This Agreement supersedes all
prior agreements and understandings by and between Employer and Employee
relating to Employee's employment.

         27.      APPLICABLE LAW. This Agreement and the rights and liabilities
of the parties hereto shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Georgia.

         28.      COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, but all of which
together shall constitute but a single document.

         IN WITNESS WHEREOF, Employee has hereunder set his hand and seal, and
Employer has caused this Agreement to be executed and delivered by its duly
authorized officers, all as of the day and year first above written.


                                                                         (SEAL)
-------------------------------           -------------------------------
WITNESS                                   THOMAS M. DUFFY


ATTEST:                                   ALLIED HOLDINGS, INC.

By:                                       By:
   ----------------------------              ----------------------------------
   Its                Secretary              Its                 President
       --------------                            ---------------


[CORPORATE SEAL]


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