To Blake's chagrin, Steven goes to work for Walter Lankershim (Dale Robertson), a small-time oilman and rival to Blake, and his new business partner Matthew Blaisdel (Bo Hopkins), Steven's old friend and Blake's former employee, who had previously been involved with Krystle. Though Walter brings Steven to a brothel in a fatherly attempt to resolve his sexual confusion, he and Matthew are unfazed by Steven's supposed preference for men, and Matthew even defends him against the homophobic glares of other oil rig workers. Steven finds a kindred spirit in Matthew's fragile wife Claudia (Pamela Bellwood), who is trying to put her life back together after a mental breakdown, and they secretly kiss in "The Chauffeur Tells a Secret". Steven is framed for an accident at Walter's oil rig and fired. He is offered his job back when his innocence is later proven, but declines; after beginning an affair with Claudia in "The Necklace", Steven decides to work for Blake at Denver-Carrington. Despite Fallon's machinations to keep him away, Steven's ex-lover Ted Dinard (Mark Withers) appears, hoping to reconcile. Steven spends the night with Ted, soon deciding he must break it off with both Ted and Claudia. As Steven and Ted are saying their final goodbyes in "The Separation", Blake enters to find them in a chaste embrace. Blake, whose discomfort with Steven's sexuality manifests itself in rage, angrily pushes the two men apart. Ted falls backward and hits his head; the injury proves fatal and Blake is arrested and charged with murder. Angry and upset, Steven testifies that Ted's death had been the result of malicious intent, which infuriates Blake and Fallon. A veiled surprise witness for the prosecution appears in the season finale "The Testimony", and Fallon gasps in recognition: "Oh my God, that's my mother!"