The ruling removes a temporary injunction granted to Elliott, that allowed him to play while the suspension was fought in court. The Cowboys have a bye this week.
The NFL countered that it followed procedures under the league's labor deal and that the union improperly filed a lawsuit before the appeals process was complete. Dallas next plays October 22 in San Francisco.
The ruling came after oral arguments were conducted last week in New Orleans before a three-judge panel of the court.
According to the letter Elliott received informing him of the suspension, the National Football League believed he used "physical force" three times over five days in a Columbus, Ohio, apartment last July resulting in injuries to Thompson's face, neck, shoulders, arms, hands, wrists, hips and knees.
Goodell suspended Elliott after a year-long investigation into domestic violence accusations made by his former girlfriend, Tiffany Thompson.
The NFL previously prevailed at the appellate level in cases involving Adrian Peterson and Tom Brady in which the NFLPA challenged disciplinary measures and scored victories at the district court level. In a letter sent to Elliott informing him of suspension in August, the National Football League stated it believed he used physical force against Thompson three times over a span of five days in July 2016.
Elliott is leading the Cowboys with 393 rushing yards on 105 carries with two touchdowns through the first five games.