Electrical – New Fan Switch Grounding Cable issues

Yes, this should work. A few things you may have already considered:

1. Each time your cable goes into or out of a junction box you should plan to lose 6" in length.

   So tying into and out of the ceiling box for the fan would require 12" of slack on the existing 4-wire cable. Your plan to add a separate junction box is a better approach. The trick is to put it at least 6" closer to the dual-wired receptacle and run 3-wire the longer distance to this box. When you tie into the 4-wire here you will have extra 4-wire to use in the ceiling fan box.

2. Don't disconnect the red wire going to the duplex receptacle.

   Just tie red and black to the un-switched black in your junction box. This puts half the load on each wire and you don't have to rewire the receptacle in the wall.

3. Get a deep 2-gang switch box to fit all those connectors

   and dissipate the heat any dimmers you use to control fan speed or dim the fan lights. You're looking at needing at more than 29 cubic inches not counting extra for dimmers. And you always want to leave room for future expansion.

4. Get a ceiling box designed to hold a fan and mount it securely to a joist.

This looks to be wired correctly prior to the current code 2014 with the exception the white wire in the second box should be marked with tape black or red just not green or white. If there are metal boxes and the boxes are grounded things would be fine but you probably have plastic boxes so adding the ground to the switch would be a good idea. You did not mention if there is a ground in the second box there should be. And it should be connected to the switch also. The main difference in your wiring and current code is that the neutral needs to be run to the 2nd box with the ground and other 3. With the grounds added to the switch(s) it would be safe, with the whit leg identified as a Curren carying conductor, this would be up to code prior to 2014. your state may be on an older version of code so depending on that it could still be up to date with the changes.