An employer may use this form to build or reach a severance or termination agreement with an outgoing employee when the employer is either contractually bound to provide severance or it determines that providing severance is in its best interests. Common scenarios in which employers elect to provide severance are when they desire a (mostly) clean break with an outgoing employee, they desire to maintain good relations with the outgoing employee or when the employer desires some protection from the outgoing employee against risks associated with litigation, competition or security.
An employer may use this letter to notify affected employees of an impending layoff or plant closing. If an employer must comply with the WARN Act, further outlined steps must be taken.