> For classical economists such as Adam Smith, the term free market refers to a market free from all forms of economic privilege, monopolies and artificial scarcities.
Employer-defined healthcare creates troughs of economic privilege, builds monopolies with respect to laborers, and enforces artificial scarcity in the supply of labor. It removes liquidity in the labor market if laborers aren't free to bid their labor to the highest bidder at any time simply because they can't risk their own health care. It's not a "free market" determined "solely" by supply and demand when the supply is artificially limited by the rent seeking inherent to employer-defined healthcare, no matter whether or not you think the solution is fairer labor regulations or how much you claim to hate government oversight. That's a market failure.
Shareholder return is not a free market function, in fact for most businesses it’s in the interest of the shareholder to have zero competition, as competitive forces require expenditure in labor and dollars to improve the product at lower margin.
Apple is the best consumer example of this. In segments where there are no competitive forces, say Mac displays, they ship high margin, mediocre products for an extended lifecycle. You can buy a shitty LG for half the price of a mediocre Apple model. The same thing happened in the pre-retina cheap MacBook Air - that thing lived 3 years too long because where else are you gonna go?
A free and liquid market in labor has some overlap with what people concerned with fairer labor market regulations want, but in other areas is diameteically opposed to what they want.
Free markets are unrealizable abstractions that lots of people like to appeal to vaguely, but very few consistently favor as more than a rhetorical device.