Under a true free market, written contracts are pointless since there are no laws to enforce. You live and die by your honor and reputation since there is no State with a monopoly of violence to punish breaches of contract.

Within that context, everyone is free to demand anything. An employer is no different from a business partner.

The reality is that people are overly tied to their current jobs, in such a way that resembles slavery. Due to that power imbalance, whenever the employer makes a crazy demand, the employee has to comply due to its inferior position.