By: Ty Hyderally,  Esq. and Kenny Delgado

In Granados v. Pan American Life Insurance Co., No. A-1736-24, 2026 N.J. Super. Unpub. LEXIS ___ (App. Div. Apr. 30, 2026, the New Jersey Appellate Division recently reminded trial courts that CEPA claims should not be dismissed for failure to state a claim simply because an employee cannot prove a violation at the pleading stage. Although this case is not published it functions as a good reminder of the protections for whistleblowers in New Jersey.  The Appellate Court stated clearly that courts must apply New Jersey’s liberal pleading standards and allow potentially meritorious whistleblower claims to proceed to discovery when the complaint alleges facts suggesting a reasonable belief that unlawful conduct occurred.

The Case

Deisy Granados worked as an insurance agent for Pan American Life Insurance and Hola Doctor. Her job involved handling confidential health information. According to her complaint, she observed coworkers bringing personal laptops into the workplace, making unauthorized copies of confidential information, and allowing non-employees access to areas where protected health information was stored. She believed this conduct violated HIPAA-related confidentiality requirements and repeatedly reported her concerns to supervisors, human resources personnel, upper management, and eventually a hotline. She alleged that the company had stated policy that prohibited such actions from occurring.

Granados alleged that after making these reports, she faced retaliation, including disciplinary action, loss of work-from-home privileges, and termination. She then filed claims under New Jersey’s Conscientious Employee Protection Act (CEPA) and for wrongful discharge in violation of public policy under Pierce v. Ortho Pharm. Corp., 84 N.J. 58 (1980)

The trial court dismissed the complaint, finding that Granados had not sufficiently alleged a reasonable belief that HIPAA violations occurred and had not adequately pleaded whistleblowing activity. Originally, the trial court allowed Plaintiff to amend the complaint. The amended complaint was then dismissed with prejudice for the same reasons as the original complaint. Plaintiff appealed. The Appellate Division reversed the decision.

The Key CEPA Lesson: Reasonable Belief Is Enough

The most important takeaway from the decision is that a CEPA plaintiff does not have to prove an actual legal violation by the Defendant at the pleading stage. Instead, the employee must allege facts demonstrating an objectively reasonable belief that the conduct violated a law, regulation, or clear mandate of public policy.

The court emphasized that Granados alleged more than mere workplace disagreements. Her complaint included allegations that:

• Unauthorized individuals entered areas containing confidential health information.
• Employees made unauthorized copies of confidential records.
• Employees used confidential information for non-work-related purposes.
• Employees brought unauthorized personal computers into the workplace.
• She reported these concerns through multiple channels and suffered retaliation afterward. Those allegations were sufficient to establish a plausible connection to HIPAA and related privacy regulations, even if discovery later reveals that no actual HIPAA violation occurred.

The Appellate Division repeatedly stressed that Rule 4:6-2(e) motions to dismiss are governed by a highly permissive standard. Courts must give plaintiffs every reasonable inference and determine whether the facts suggest a viable cause of action in order to succeed under the CEPA statute.

What Does a CEPA Plaintiff Need to Plead?

The decision provides a useful roadmap for CEPA pleadings. A complaint should allege:

1. A reasonable belief that conduct violated a law, regulation, or clear mandate of public policy.
2. Specific whistleblowing activity, such as reporting or objecting to the conduct.
3. An adverse employment action, such as discipline, demotion, or termination.
4. A causal connection between the report and the adverse action.

Importantly, the court held that employees are not required to recite “magic words” or provide every detail of every report they made. Allegations that the employee repeatedly reported suspected wrongdoing to supervisors may be enough to survive a motion to dismiss.

Takeaway for Employers and Employees

Granados serves as a reminder that New Jersey courts continue to interpret CEPA broadly and in favor of protecting whistleblowers. When an employee pleads concrete facts showing a reasonable belief that conduct may violate the law and alleges retaliation for reporting it, dismissal at the pleading stage should not happen.

Additionally, the court clarified, causes of action under Pierce v. Ortho, should not immediately be dismissed as a part of CEPA’s waiver of rights under the common law. Rather the causes of actions should be allowed to get past the pleading portion of a case. The Court emphasized that the waiver in CEPA should manifest after discovery when the Plaintiff has the opportunity to make an informed decision.

Reinforcing the strength of New Jersey’s statutory and common law protections is typically at the forefront of the Court’s mind. Thus, knowing how to navigate and use these powerful tools is crucial for a worker seeking protection.

If you have any questions regarding your rights as an employee, you should seek an experienced attorney who concentrates in employment law. Our firm has been concentrating in employment law for over twenty-three (23) years!

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