Derek is a Vinci Crime Family capo and head of the local chapter of the longshoreman's union. He started working the docks as a strikebreaker in 1916. It was his involvement in dockyard smuggling that led to his introduction to the Vinci family. After spending two years in prison for embezzlement, he played a prominent role in Empire Bay's Vinci-Moretti War in the early 1930s, after which he was rewarded with his current position. He then married Frank Vinci's goddaughter, bringing him further prestige. Derek is vulgar, violent, and greedy, perfect attributes for his job. 
Derek is introduced to Vito Scaletta in February of 1945 when Vito comes to see him about a job. Derek had employed his father Antonio Scaletta and Vito's mother insisted he do the same. Derek doesn't think much of Vito at first and gives him a menial job loading crates. After a few minutes doing this Vito walks off, telling his right hand man Steve Coyne he could make more money working for Barbaro Incorporated.
Hearing that he knows Joe Barbaro, Steve took Vito back to talk with Derek. After verifying his story with Joe, Derek gives Vito a job more suited to his talents; collecting the "barber's fee" from the dock workers. Vito not only collects the money, but he takes care of Bill, a worker who had been giving Derek and Steve problems.
Aside from running the docks, Derek also operates a profitable Vehicle Export business for the Vinci family. They buy stolen high value cars and export them to overseas countries where they are sold for a substantial profit. Vito Scaletta, Joe Barbaro, and many other criminals in Empire Bay take advantage of this racket to make money on the side from their usual work.
Years after first meeting Derek, Vito comes to him looking for work. As it turns out, Frank Vinci was organizing a sit down with the other bosses and he took all of Derek's men as bodyguards. Derek recruits Vito to help settle a labor dispute among the dockworkers, who are demanding that Derek give a job back to a worker he fired.
Over the course of the negotiations, Vito's name is mentioned and an Old Dockworker recognizes him as Antonio Scaletta's son, who asks why Vito is working for Derek after what he did to his old man. Steve immediately tells the man to shut his mouth but another worker speaks up and tells how Derek and Steve killed Vito's father. When pressed for answers, Steve finally admits to drowning him.
After finding out the truth about his father's death, Vito goes after Derek and Steve, killing anyone else who gets in his way. After he's killed the last of them, Vito finds a substantial amount of money in Derek's desk and helps himself to it. The dockworkers decide they will keep Vito's name out of it when the police arrive and Vito wishes them good luck as he leaves.
- Derek can be seen much younger when the Scaletta family arrives in America at the docks, eating a sandwich. He is about 29 at that time.
- He has the same voice actor as Joe Barbaro, Robert Costanzo.
- His last name is spelled "Pappalardo" in both the Mafia II Family Album and mission objectives, but subtitles show it as "Papalardo". His name is also misspelled in The Story of Frankie Potts.
- It is possible to skip killing Derek in Chapter 14 if Vito already has the money needed to pay back Bruno.
- Derek can be seen at almost any time in his office, even in Chapter 15 after he's been killed.
- If the player enters his office at any time and talks to him asking for a job, he will say he has nothing for Vito and to come back soon. Originally the game featured side jobs for Derek, but this was cut.
- Derek is very much a representation of a padrone, one who arranges work for immigrants in exchange for a portion of their salary.