Shawn gets a middle-of-the-night visit from a frantic Gus telling him that he "screwed up bad." Gus tells Shawn that he finally stood up to his horrible boss Dorian Creech and gave him his letter of resignation with the some threatening words written at the bottom. Before Shawn can congratulate Gus on his uncharacteristic assertiveness, Gus drops a bomb. Gus explains that he later returned to the office to rescind his resignation and found Creech stabbed to death in his office, clutching the note Gus had written to him earlier. Gus explains that he panicked, grabbed the note from Creech's dead hands and ate it. But then he started to choke on it, and things got out of control. Gus explains that he accidentally ruined the crime scene and made it look like he was the one who killed Creech. Shawn tells Gus to calm down and that they will head to the office and have a look.
At the office, Shawn sees the damage and is instantly worried; it's worse than he thought it was going to be. They both start to panic, one thing leads to another and Shawn ends up with a bloody nose. He sneezes, getting blood all over the already tainted crime scene. Now they are faced with having to clean up the whole crime scene or risk being arrested for Creech's murder. They do so, then decide to enlist the help of Henry.
The next morning, Creech's office has been turned into a crime scene. The security guard at Central Coast Pharmaceuticals, Leslie Sally, tells Lassiter that he is going to head up part of the investigation. Sally discovers a lead that takes them to the parking garage. There, they find a piece of evidence - a coffee thermos Shawn brought from Juliet's house and accidentally left there the night before. Since Juliet's fingerprints are on the mug, Shawn knows that he has to tell her the truth about what's going on so she doesn't get investigated for Creech's murder either. Juliet is beyond peeved, but she agrees to slow down the testing at the lab while Shawn and Gus find the real killer.
The following day, the office has gathered for a memorial. There, we meet the Senior VP from headquarters Mitch Murray and Finch, Creech's biggest ass-kiss employee. Next, Shawn and Gus get a call from Woody saying that he found some incriminating evidence on the body - the smell of cocoa butter lotion and Axe body spray. Woody knows that Gus wears cocoa butter lotion and that Shawn wears Axe body spray, so he asks the boys to explain themselves. Shawn and Gus reassure Woody that they didn't kill Creech, but Woody admits he is terrible at keeping secrets and allows the boys to tie him up at the Psych office until they have found the real killer.
Shawn and Gus go to question Creech's assistant Helen. Helen tells them that she squirted eye drops in his coffee on the morning of his death because Creech had treated her poorly. And when she went into his office later that night to retrieve a forgotten file, she found him lying dead on the floor and therefore thought that it was the eye drops that made him deathly ill. Shawn and Gus know she isn't the killer because Creech died from stab wounds, not from illness. They tell Helen she's innocent and she's relieved.
Later, Sally approaches Shawn and Gus and says he knows it was them who tampered with the crime scene. Sally found out when he discovered the bag of evidence they threw out. But before Sally can alert the cops, Sally drops dead. Someone poisoned him. Shawn shuffles through the bag of evidence Sally found and discovers two pieces of evidence that tells him who the real killer is.
Lassiter receives results from the lab and knows that Shawn and Gus tampered with the evidence at the crime scene. Shawn and Gus still need to prove their innocence in full, so they run from Lassiter and his assisting officers in order to do so. They head directly to Gus' office to breakdown the case in front of his co-workers. Shawn addresses the crowd and tells them that it was Mitch Murray who murdered Creech. Creech found out that Murray was into some shady dealings at the company and that Creech was blackmailing him and trying to make a play for Murray's job at headquarters. Murray killed Creech to keep him quiet, and when he found out that Sally was onto him, Murray killed him.
Just as Lassiter is about to come down hard on Shawn and Gus for messing with a crime scene and tampering with evidence, Juliet arrests Mitch for the murder of Creech, and Lassiter lets our guys off with a warning.