Most workplace emotional exhaustion (EE) research emphasizes antecedents that are theoretically and empirically grounded in individual-level phenomena. We extend this research by proposing a multilevel framework involving organizational context determinants operationalized in two ways: psychosocial safety climate (PSC) and work unit-level bullying. We drew on Social Learning Theory to explain how bullying can be conceived as a work unit-level construct. We proposed that bullying is a mechanism linking PSC to EE, and considered a novel work unit-level (between-unit) process over and above an individual (within-unit) process. The first study tested the between-work process of 147 work units using an innovative split-sample (multi-source) design and found that PSC preceded bullying and EE in other employees within the same work unit. The second study of 54 work units, examined between- and within- work unit processes simultaneously. Bullying was operationalized by integrating target and perpetrator reports. We found that EE was explained by contextual factors, and that bullying was the mechanism linking PSC to EE. Reverse relations showed that average work unit EE related to bullying, but not as strongly as the hypothesized relationship. Interventions to reduce EE should go beyond the clinic to focus on the PSC and bullying contexts.