Idealistic, "New Age" unit manager Tim McManus (Terry Kinney) persists in trying to mold "Emerald City" (aka Cell Block 5 of Oswald State Correctional Facility -- formerly Oswald Maximum Security Penitentiary) into a model "prison within a prison" as Oz begins its third season. Part of McManus' pie-in-the-sky plan includes the hiring of his old friend Sean Murphy (Robert Clohessy) as a guard. Alas, Murphy's efforts to redirect the convicts' energies and hostilities into good, clean athletics are compromised when one inmate renders another inmate brain-dead in a boxing match. No one is more delighted at Tim McManus' frustration than the state's ambitious governor James Devlin (Zeljko Ivanek), who as part of his platform to strip the cons of all perks and privileges has ruthlessly slashed the prison's budget to the bone. In addition to Sean Murphy, Officer Claire Howell (Kristin Rhode) joins the guard unit, immediately making enemies of everyone within the sound of her voice. Not only does Howell force the cons into having sex with her to lighten up punishment duty, but she also ends up suing McManus for sexual harassment. Sensing the opportunity to establish themselves as top dogs at Emerald City block leaders, convicts Adebisi (Adewale Akinnouye-Agbaje) and Wangler (J.D. Williams) likewise gang up on McManus, taking their complaints to the press. Elsewhere, the death sentence of Shirley Bellinger (Kathryn Erbe) is commuted to life without parole when it turns out she is pregnant; Warden Glynn (Ernie Hudson) hires Off. Clayton Hughes (Seth Gilliam), the son of one of Oz's former guards, only to discover that Hughes is a psycho on a revenge kick; Beecher (Lee Tergesen) hatches an elaborate revenge scheme of his own; and charismatic Muslim leader Said (Eamonn Walker) is among those thrown into solitary after a bitter racial showdown. The season ends with a not-so-merry Christmas for all, and to all a bad night.