In July 2010, Deacon is paroled from prison. He encounters Phyllis, now estranged from husband Nick Newman (Joshua Morrow), and stuck in her car with a flat tire during a thunderstorm in a rather isolated area - somewhat near the Abbott cabin. Though she refuses Deacon's offers of help, when Phyllis sees Nick approaching, she kisses Deacon, in an attempt to make Nick jealous. However, as soon as Nick leaves, Phyllis stops and orders Deacon out of her car. A few weeks later, Deacon applies for a job as bartender at Gloria (Judith Chapman) and Jeffrey Bardwell's new club, Gloworm. Gloria hires him, much to the annoyance of many in Genoa City, still angry at his manipulations and his role in framing Daniel for murder. At his new job he gets to see Phyllis again and Deacon immediately starts flirting with her. When he kisses her again, Phyllis first kisses him back, before slapping him across the face as Phyllis' ex-husband and good friend Jack Abbott (Peter Bergman) walks in. Feeling humiliated when she finds out that Nick is letting his ex-wife Sharon Newman (Sharon Case) stay at their house, Phyllis returns into Deacon's arms and they have passionate sex in front of a dumpster behind Gloworm.