Michael, desperate to be liked and protective of his "family," refuses to let Holly fire or even discipline Meredith. He even goes so far as to claim that Meredith’s actions are "heroic" because she’s saving the company money.
The room goes quiet until Meredith, in a moment of brutal honesty, admits she’s been sleeping with the regional representative of a collection company (Bruce Sunrise) for the past six years. Her reasoning? She gets a discount on office supplies for Dunder Mifflin and "Outback Steakhouse gift certificates" for herself. [S5E3] The Plant
It sounds like you’re looking for a recap or a "story-style" breakdown of , titled "The Lotus" (though it’s famously known as the "Business Ethics" episode involving the fallout from the "Plant" incident). Here is the story of that episode: The Story of "Business Ethics" Michael, desperate to be liked and protective of
The day begins with a standard corporate seminar on ethics, led by Holly Flax from HR. It’s exactly as dry as you’d expect—until Michael Scott decides to make it "real." He encourages everyone to confess their workplace sins, promising immunity. Her reasoning
In the end, Michael sees how upset Holly is. He realizes he cares more about her feelings than he does about being right. He organizes a second ethics meeting—this time, much more somber—where he stands by her side. They don't fix the ethics of the office, but they fix their relationship.