Facebook, Microsoft, Amazon and Apple are among the companies arguing that the temporary visa bans will damage US firms.
Mr Trump has imposed travel restrictions on some foreign workers to safeguard jobs for Americans during the virus pandemic.
The Technology companies are the most hit by this new decree by Mr. Trump because they have lots of workers from africa and other parts of the world.
Microsoft, Netflix, Twitter and other big technology companies also backed the lawsuit, which was filed last month by major US business associations.
- Trump targets foreign workers with new visa freeze
- Trump signs immigration green card suspension
- Why Trump’s H-1B visa freeze will hurt India most
Those industry groups included the National Association of Manufacturers, which represents 14,000 firms, and America’s biggest business association, the US Chamber of Commerce.
The brief argued that the visa restrictions, which were announced in June, will hurt US businesses.
The companies said Mr Trump’s proclamation was based on a “false assumption” that it would protect American jobs as it would mean they may now have to employ people in other countries.
The brief said: “Global competitors in Canada, China, and India, among others, are pouncing at the opportunity to attract well-trained, innovative individuals.
“And American businesses are scrambling to adjust, hiring needed talent to work in locations outside our nation’s borders,” it continued.
They also contended that it could do irreparable damage to American businesses, workers and further hurt the already struggling US economy.
Mr Trump’s proclamation suspended the entry of a range of foreign workers until the end of this year.
Silicon Valley reaction
Shortly after the announcement in June some of America’s biggest technology companies condemned the move.
Facebook said the order “uses the Covid-19 pandemic as justification for limiting immigration” and warned: “In reality, the move to keep highly skilled talent out of the US will make our country’s recovery even more difficult”.
Apple boss Tim Cook wrote on Twitter that he was “deeply disappointed” by the new proclamation, while Sundar Pichai, head of Alphabet – the parent company of Google and YouTube – said immigration was critical to the success of his company and the country.
Amazon, which received more than 3,000 H-1B visas last year – more than any other firm – called the order “short-sighted”.
Who is affected?
The Trump administration said the freeze would impact about 525,000 people.
That included an estimated 170,000 people blocked by the decision to extend a ban on some new green cards – which grants permanent residence to foreigners.
The White House first announced it was halting those visas in April. Existing visa holders are not expected to be affected under the new restrictions.
The order also applies to H-1B visas, many of which are granted to Indian technology workers.
Critics say those visas have allowed Silicon Valley companies to outsource American jobs to lower-paid foreign employees.
Last year, there were about 225,000 applications competing for 85,000 spots available through the H1-B visa programme.