Date: 201602
Local time of day: 0601-1200
Location: ZZZ.ARTCC, US
Flight conditions: Mixed
Weather elements / visibility: 9
Light: Daylight
Aircraft: B737-700
Operator: Air Carrier
Operating under: Part 121
Flight plan: IFR
Mission: Passenger
Flight phase: Climb; Cruise
Airspace: Class A ZZZ
ATC / advisory: Center ZZZ
Aircraft component: Trailing Edge Flap
Component problem: Malfunctioning
Reporter organization: Air Carrier
Reporter function: First Officer; Pilot Not Flying
Reporter qualification: Flight Crew Air Transport Pilot (ATP)
Human factors: Troubleshooting; Training / Qualification; Distraction; Communication Breakdown; Workload
Second reporter function: Dispatcher; Captain; Pilot Flying
Anomaly: Aircraft Equipment Problem Less Severe; Deviation - Altitude Overshoot; Deviation / Discrepancy - Procedural FAR; Deviation / Discrepancy - Procedural Published Material / Policy
Detector: Automation Aircraft Other Automation; Person Flight Crew
When detected: In-flight
Result: Flight Crew Landed As Precaution; Flight Crew Diverted; Flight Crew Became Reoriented; Flight Crew Took Evasive Action; General Maintenance Action
Contributing factors: Human Factors; Aircraft; Procedure
Primary problem: Aircraft

Narrative: Arrived early and our through flight was swapped to a broken aircraft that wasn't/didn't make its origination flight. After waiting; the Agent let us down to get information from Maintenance Personnel. Maintenance person stated that he was in the process of replacing a wire harness in the wheel well for discrepancy of a continuous clicking noise in the aft cargo bay; having worked the issue overnight. As we slowly made progress with preflight; I reported a Proximity Slate Electrics Unit (PSEU) light also illuminated on the overhead panel. After he completed work in wheel well; and several cycles of the flaps; Maintenance person moved onto the PSEU issue. He took care of issue; and stated that one circuit breaker was open; which wasn't on initial inspection. By this time; the aircraft was already boarded with all Passengers; which may have induced some pressure to get going.After a normal flaps 1 takeoff; and achieving minimum clean-up altitude; repeated and selected flaps UP; as called for by Pilot Flying (PF). Split second after; we got a continuous Configuration Warning horn. We assessed that the gear; trailing edge; and leading edge flaps/devices all indicated UP while climbing to 5;000 feet. At this time we were given a right turn to southwest; and climb to approximately 15;000 feet. As it became tough to communicate with PF; I recommended re-extending flaps to one. PF concurred; and directed flaps one with horn silencing just prior to indicating flaps 1. I recommended we don't exceed 230 knots/FL 230 vice FL200.  Stabilized in climb; we continued troubleshooting the problem; our options; and course of action. Since aircraft was in full control the entire time; we eliminated any control issues; whether to retract flaps; and continue climb to altitude towards our destination with horn; continue with possibility of diverting later; when below max landing weight; or return to [departure airport]; but were overweight. We chose to continue on track for now; with ample fuel/time to return if needed. At this time; we were given a climb to FL230 to which I asked if we wanted to climb or stay lower. PF stated that we'd stop at FL220 (having in my mind my erroneous reference to FL230). In climb; PF transferred controls to me so he could appraise F/As and Passengers.Pilot Monitoring (PM) (Captain) contacted Dispatch; and Chief Pilot on Call; to discuss issue; and best plan of action regarding continue/divert/return. I informed ATC FL220 would be our final; and were working a malfunction; but no assistance immediately needed. By this time we were already at FL220; when Chief Pilot on Call stated to descend to FL200; and then consider cycling flaps; which we had already done. Descending to FL200; steady Configuration Warning horn returned; which we attributed to thrust lever position. Decision to divert was made; and coordination with ATC/Flight Attendants (FA)/Passengers took place. Since fuel was not an issue; I recommended lowering landing gear several times; in an effort to rid the continuous horn and aid with fuel burn to reduce to max landing weight. Once gear finally lowered; continuous horn went away. Rest of flight and landing was uneventful.Without knowing the actual Maintenance determination of why the Configuration Warning horn would sound with flaps less than 1; I am not entirely sure. Captain stated to delay boarding until Maintenance was completed to ensure there was no implied pressure to get aircraft pushed. I should have been precise with flap altitude restriction. Recommend changing limitation verbiage to 'Max altitude for flaps' FL200 vice 'Do not extend flaps above FL200'; since we did not extend above FL200 but did indeed climbed above FL200 which still exceeded the intent/purpose of limitation/company procedure/policy. As PM; I should have been more assertive with staying at our present altitude approximately 15;000' until troubleshooting was complete and definitive plan of action made.


Second narrative: Flight departed without any issues. All checks were normal and the takeoff roll was uneventful. When they brought the flaps up to zero they got the takeoff warning horn so they extended the flaps back to 1 and the horn stopped. When they tried to bring the flaps up again they got the horn so they extended them to 1 again and continued on the filed route at FL220. I was notified via ACARS that they were having an issue so I notified [maintenance]. After conferencing with the Chief Pilot we descended to FL200 to comply with the flaps extended altitude limitation. With the exception of the [takeoff] warning horn; all indications and flight characteristics were normal. The crew said they had the fuel to make our filed destination but we elected to stop at an enroute airport. The flight continued to the divert airport at FL200 and flaps 1 without incident and landed uneventfully.


Synopsis: After departure a B737-700's flaps failed to retract beyond Flaps 1 with a continuous TAKEOFF WARNING HORN. Initially the crew incorrectly climbed to FL220; above the airframe limitation while troubleshooting; but then descended to FL200; extended the landing gear to cancel the horn and diverted to an enroute airport.