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A Pennsylvania federal judge ruled Thursday that a Georgia law professor cannot intervene in or unseal a settlement reached between restaurant chain P.F. Chang's and more than 6,000 tipped servers, stating that doing so would jeopardize the deal.

Senior U.S. District Judge Anita B. Brody denied the motion filed by Charlotte Alexander, a professor at the Georgia Institute of Technology's Scheller College of Business, who sought to unseal the settlement. Alexander, the founder of a lab dedicated to improving court data accessibility, had argued that there is a federal consensus on the importance of transparency in Fair Labor Standards Act (FLSA) settlement agreements. She urged the court to make the terms of the P.F. Chang's settlement public.

However, P.F. Chang's opposed the motion, asserting that the confidentiality of the settlement's monetary terms was a negotiated condition, and that disclosing these details would void the agreement. The restaurant chain emphasized that it had agreed to keep the financial aspects of the deal private and that any attempt to unseal the terms would breach this condition, effectively nullifying the settlement.

Judge Brody sided with P.F. Chang's, stating that the confidentiality of the settlement was a critical component. She pointed out that two sections of the settlement explicitly outlined that the deal could only proceed with redacted monetary terms. If those terms were disclosed, the settlement would become void, Judge Brody explained.

The judge also warned that invalidating the settlement could delay the case, potentially forcing the parties to renegotiate or, in the worst-case scenario, causing P.F. Chang's to abandon the settlement talks entirely.

The workers, who initially filed the lawsuit in 2018, claimed that P.F. Chang's violated both federal and state labor laws by requiring servers to spend more than 20% of their time on non-tip-related tasks, yet still paying them the subminimum wage rate allowed for tipped workers. According to the FLSA, employers can pay tipped workers as little as $2.13 per hour, provided their tips make up the difference to meet the federal minimum wage of $7.25 per hour.

The lawsuit centered around the so-called "80/20 rule," which allows employers to claim a tip credit only if workers spend less than 20% of their time on non-tipped duties. While the U.S. Department of Labor had codified this rule in 2021, it was later struck down by the Fifth Circuit Court of Appeals in August.

Judge Brody emphasized that after six years of litigation and negotiation, nullifying the agreement would harm the thousands of workers poised to benefit from the settlement, particularly given the recent legal uncertainty surrounding the 80/20 rule. She noted that reversing the agreement could result in "a clearly defined and serious injury" to the parties involved.

The case, Belt et al. v. P.F. Chang's China Bistro Inc., is ongoing in the U.S. District Court for the Eastern District of Pennsylvania.

Representatives for the parties involved did not immediately respond to requests for comment following the ruling.

Parties Involved:

• Charlotte Alexander is represented by Michael J. Quirk of Motley Rice LLC and Lauren E. Bateman of Public Citizen Litigation Group.
• The workers are represented by Reena I. Desai, Caitlin L. Opperman, and Daniel S. Brome of Nichols Kaster PLLP, and Patricia A. Barasch of Schall & Barasch LLC.
• P.F. Chang's is represented by Paul DeCamp, Kathleen A. Barrett, and Jill K. Bigler of Epstein Becker Green, and Michael W. McTigue Jr., Meredith C. Slawe, and Colm P. McInerney of Skadden Arps Slate Meagher & Flom LLP.