In 1976, Derek met Jill Foster when she was working as a manicurist at his salon. Jill and Katherine Chancellor fought over Derek. Derek was tricked into marrying Katherine by Kay herself after Kay had fallen in love with him. Katherine got Derek drunk and then married him. Derek was actually attracted to Kay's sworn enemy, Jill, but he decided to go along with Katherine. He knew he would gain wealth if he lived with her for a year and could then set up his own salon.
Derek eventually fell in love with Jill, though, which nearly drove Katherine to suicide. Jill then became romantically involved with Stuart Brooks. After seducing him, she faked a pregnancy and they planned to marry. She altered her plans when Derek told her he wanted her back. Jill wanted him to prove himself to her and arranged to marry Derek and Stuart on the same night, in case Derek failed. Katherine convinced Derek to stay with her, albeit in a platonic relationship, for one year.
Derek decided to go back to Katherine. As a result of Katherine's scheme to hold onto her husband, Jill ended up marrying Stuart instead. Unfortunately, Derek's past in organized crime came back to haunt him when the mob tried to shoot him, but accidentally shot Katherine, who was left paralyzed. Even after she recovered, Kay used her health as a way to hold onto Derek. Derek's life took another strange turn when his ex-wife, Suzanne Lynch, came to town prepared to do anything to win Derek back.
By lacing candy with drugs, she attempted to drive Kay insane but it backfired when it appeared Kay had been killed by the candy. Derek, free of both his wives, inherited the Chancellor fortune, became CEO of Chancellor Industries and planned to marry Jill.
In June 1980, Derek went to work at Chancellor Industries. George Packard, a friend of Rex Sterling's, didn't trust Derek so he arranged for Judy Wilson to work as Derek's secretary to keep tabs on him in an effort to protect Kay. But George's plan backfired. Judy led Derek to believe that she was actually his ally. Meanwhile, Douglas Austin tried unsuccessfully to pursue a romance with Kay. With Douglas pining for Katherine, Derek turned his romantic attention to Judy.
Jill's marriage ended after Stuart found out she was never pregnant. She attempted to reunite with Derek when Katherine was presumed dead. Just before they married, Katherine revealed she was still alive and Jill lost Derek again. Everyone was shocked when thought-to-be-dead Katherine showed up at the wedding to reclaim her fortune—and Derek, as well. The newly-reunited couple decided to go on a cruise, but while traveling they had a fight that resulted in Kay jumping overboard.
When she returned from being held captive by and falling in love with a man named Felipe Ramirez, she divorced Derek. He left town after being rejected by Kay.
Derek had a friendly reunion with both Jill, who informed him she had gotten married, and Kay, who had just recently had a face-lift, when he appeared at the wedding of Victor Newman and Nikki Newman in 1984.
- Jamie Thurston (son with Suzanne)