The American Civil Liberties Union filed the suit in August on behalf of 30-year-old Stephanie Babines, who wanted to open the studio in Adams Township. Officials had barred Babines from opening the studio, saying it was a sexually oriented business.
The ACLU's legal director in Pennsylvania Witold Walczak says he is satisfied with the settlement. The agreement still needs to be approved by a federal judge.
Babines' classes include pole-dancing, power lap dance, strip tease and "SeXXXercise." They are all taught and performed fully clothed.