Drew's best friend Kate begs him to hire her at Winfred-Louder, the department store where he works, after she gets fired because of a breakup with her deadbeat boyfriend. Drew is hesitant because he isn't supposed to hire his friends. While holding an interview for a job in the cosmetics department, Drew meets Mimi Bobeck, a hostile and argumentative woman who twists Drew's words and lands him in hot water with Mr. Bell, his boss.
Mr. Bell hires Mimi as his assistant to keep her from filing a complaint about Drew's "harassment". She vows to make his life a living hell. Drew meets attractive job applicant Lisa and the two become friendly fast. However, once Lisa is hired, he is worried about dating her because of how it would look for management to be dating an employee. Meanwhile, Drew's neighbors cause trouble next door.
Kate is depressed when another wedding shower is held at work and she realizes that most women her age are married or are getting married; she's always dreamed of having a wedding of her own. Drew, Oswald and Lewis decide to cheer her up by throwing a fake wedding party for her and Drew at the Warsaw. The guys wonder why none of them ever dated Kate and, later that night, Drew confesses to Kate the crush he had on her in high school.
Drew fires Suzie, an inept employee, only to find out she was Mr. Bell's mistress. Kate proposes her idea for a day spa to Mr. Bell, who is so impressed he wants to meet with her and Drew at the Warsaw to discuss it. Unfortunately, Drew discovers Mr. Bell is only interested in making Kate his latest conquest.
Kate's ex-boyfriend Barry refuses to pick up his stuff and makes incessant phone calls to Kate at work. Drew attaches a cartoon to the bottom of a memo in the hopes of boosting company morale. Most employees are amused by it, but one offended employee complains to Mr. Bell. Drew becomes obsessed with finding out who it was that got him in trouble.
Drew turns down the Winfred-Louder attorneys when they try to get Drew to settle the lawsuit by signing a waiver that absolves the store of any responsibility. Drew hires a lawyer, who happens to be an insufferable ex-boyfriend of Kate's, but is left high and dry when he has to fire his lawyer for making passes at Kate.
Drew gets ready to defend himself against Nora's lawsuit but isn't very successful. Nora cries on the stand to get everyone's sympathy and the outlook is pretty bleak for Drew. Because of the stress of the case, Drew loses it during an argument at the Warsaw, gets arrested for assault, and has to doubly defend himself.
Lewis' sister Janet moves back to Cleveland with her preteen daughter Monica. Drew, who once had a thing for Janet in grade school, invites Janet and her daughter to a concert at the Rock and Roll Hall of Fame. Lewis is vehemently against Drew spending time with Janet because he's afraid someone will get hurt. Sure enough, as Drew and Janet become more involved, Drew begins to realize how clingy and desperate Janet really is.
Mrs. Louder, the widow of the store's founder, offers Drew a job as her personal assistant; the position comes with a pay raise and a guarantee he will be in the running for head of personnel. Drew is between a rock and a hard place because he's unsure if he wants to change jobs but is afraid he'll be fired if he doesn't accept Mrs. Louder's offer.
When Kate starts neglecting the guys after she gets a new boyfriend, the gang starts hanging out with Jay Clemens, an old school buddy they run into at the Warsaw. Kate eventually breaks up with her boyfriend and is outraged that Jay has seemingly taken her place in the gang. Everything comes to a heated and surprising end the night of Drew's birthday party.
Drew's father George is back in town to accept a lifetime achievement award from his lodge, the Wildebeests. He convinces a reluctant Drew to join him at one of the meetings to help convince Drew to become a member. However, Drew is disgusted to find that most of the lodge members are racists and exclude people from membership because of their race.
The employees at Winfred-Louder go on strike and Drew, while sympathetic, is forced to hire replacements. Despite promising not to let the strike hurt their friendship, Kate gets angry with Drew for letting Mimi and Oswald replace her at the cosmetics counter. As the weeks go by, tensions start to run high and Drew is pressured to take a side once and for all.