The client is mistaken. There is no such thing as "derivative Works law", at least not in the sense that the client suggests; there is only copyright law.
US Copyright Law
17 USC 106 says:
Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:
(2) to prepare derivative works based upon the copyrighted work;
17 USC 101 defines "derivative work" as:
A “derivative work” is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications, which, as a whole, represent an original work of authorship, is a “derivative work”.
Note that merely creating ("preparing") a derivative work without permission is an infringement of copyright, whether or not it is then published or otherwise distributed; the comment to another answer is incorrect about that.
Moreover, the process of "extracting" the thesaurus would almost surely be copyright infringement itself, the making of an unauthorized copy, quite aside from any issue about the derivative work. If a consultant was hired to do such extraction, the consultant would be committing copyright infringement, and could be successfully sued by the copyright owner, if the owner became aware of the facts. US Statutory damages can be as high as $150,000 per work in cases of willful infringement. ($30,000 per work if not willful.)
The answer by Ryan M gives a plausible way in which the client's confusion might have occurred, but there are many serious misconceptions about copyright floating on the net.
Berne Copyright Convention
Article 1 of the Berne Convention (more formally the "Berne Convention for the Protection of Literary and Artistic Works") says, in relevant part:
(3) Translations, adaptations, arrangements of music and other alterations of a literary or artistic work shall be protected as original works without prejudice to the copyright in the original work.
(6) The works mentioned in this Article shall enjoy protection in all countries of the Union. This protection shall operate for the benefit of the author and his successors in title.
Almost every country in the world has signed and ratified the Convention. (Many of those that have not have signed the TRIPS agreement, which includes most of the protections of Berne.) While the details of copyright protection, and any exceptions to copyright are specified in the laws of individual countries, and differ from country to country, the making of derivative works is an infringement in every country that adheres to the Berne Convention, and so is the making of unauthorized copies. The operations described in the question would not be lawful (without permission from the copyright holder) in any country that adheres to the Berne Convention.
As the Wikipedia article on the Convention says:
Subject to certain allowed reservations, limitations or exceptions, the following are among the rights that must be recognized as exclusive rights of authorization:
- the right to translate,
- the right to make adaptations and arrangements of the work,
- the right to make reproductions in any manner or form ...
In short, there is no general right to make derivative works from copyrighted originals without permission. Doing so is infringement, and can lead to a successful suit for damages. Damage amounts will depend on the law of the country where suit is brought, but can be sizable. A consultant who assists in this process might also be subject to suit.