Ted comes into his office to roughhouse with Rose, who is taking a break from aftercare. They're interrupted when Veronica comes in and suggests Rose hit him in the head with a telephone. When that doesn't go over well, she talks to Ted in private about a sexual harassment issue. She informs him that an employee is filing a sexual harassment case, but the company's legal department won't tell her whom. Ted goes to the cubicles to find out.
In the lab, Phil and Lem learn that the company is forcing Chumley their chemical-spill cleanup expert into retirement. They check to see if Chumley is gone by spilling something on the floor. Chumley the robot comes out and cleans it up. Phil explains that Chumley is being sent to the robot farm where he'll be allowed to run and play with other robots. They're shocked when Carlos, the new spill technician comes in, and insists it's a crime that the company is replacing robots with humans.
Ted talks to Linda, who admits that she's the one being accused of sexual harassment. She explains that she tried to console fellow employee Sheila when her cat died, but her hug was misinterpreted when she hit Sheila's breasts with her face. Then she gave her a shoulder rub to relieve her tension, and that got misinterpreted as well. Ted goes to explain to Sheila that she misinterpreted Linda's gestures. However, he goes too far and suggests she should really get to know Linda, and she should tag along. When Veronica gets word of the new lawsuit, she tells Ted what is happening and informs him that she'll handle it.
Phil and Lem ask Ted if they can see Chumley and give the robot its spare battery pack before it leaves for the farm. Ted finally breaks down and explains that company robots are taken to the sub-basement and broken down for parts.
Veronica goes to see the company lawyer handling the lawsuit, and discovers the man is in rehab for alcoholism. However, the company can't fire him because alcoholism is a disease. Veronica get an idea and the next day tells Linda and Ted that she's convinced the company that sexual harassment tendencies are a disease. No one suffering from it can be fired or punished. Ted insists he doesn't have a disease, and is even more unhappy when he learns he has to go to harassment seminars. Linda and Ted vow not to go, but Veronica warns that if they fight it and lose, they could be fired.
Phil and Lem go to the sub-basement and find Chumley, and vow to repair him.
Ted and Linda end up going to the sexual harassment seminar. They insist they don't have a disease but the organize, Denise, points out that denial is one of the symptoms. When Linda points out that Ted is repressed, Denise explains that sexual harassment comes when men are repressed. She wants Ted to express himself emotionally and he agrees if it'll get him to graduate.
Veronica begins to realize that the office has become much more relaxed now that everyone can flirt openly without punishment. Ted is unhappy because he has to become emotional. Meanwhile, one of the seminar attendees hits on Linda sexually. She takes offense and tries to show him what it's like by insulting his genitalia. When he's offended, she dares him to report her because she has a disease and no one can do anything about her.
Phil and Lem finish putting Chumley back together and he seems to work. Carlos notices and complains that it's about humans, not machines. Once he leaves, Chumley goes out of control, spraying liquid in Lem's face and running in circles.
Ted is busy expressing his emotions and getting affidavits proving he did it. Meanwhile, Veronica realizes that all the flirting is affecting productivity as everyone is having sex. Phil and Lem come to Ted and ask for access to the robotics lab so they can fix their friend, but he tells them it's time to let it go. A female co-worker tries to flirt with Ted, but he realizes he's the only one who can't do anything about it, or he won't graduate. He complains to Veronica, but the sexually charged atmosphere causes them to start flirting with each other. Before they give in entirely, Rose comes in, interrupting them.
One of the seminar members, Keith, starts hitting on Sheila. Linda comes to her rescue by harassing and insulting him. Sheila thanks her and Linda admits she should have respected her boundary. Sheila admits she might have overreacted, and Linda is off to harass another sexual harasser. Impressed by her heroism, Sheila drops the lawsuits.
Phil and Lem resolve not to quit on Chumley. However, the robot goes berserk again and Carlos intervenes, killing it once and for all. The two researchers realize they've been having an inappropriate relationship as well.
Ted and Veronica finally come up with a solution to stop the flirting: they have aftercare staff march the children through at random intervals, breaking up everyone's sex drive. Veronica admits that it would be interesting if she and Ted got together, but it would end up being a bloodbath. And Ted realizes he does keep his emotions bottled up too much... except around his daughter. Who takes Veronica's advice and hits him with a telephone.