If he had gone to work for employer B, then he could apply for a new H1B visa (there really isn't a transfer). However, you can skip a few steps (notably the worrying about the cap) on a subsequent application.

However, since he essentially had an H1B that went unused, I'm pretty sure the fact he ever had an H1B is immaterial to the entire situation.

If he wants to convert from an L1 to an H1B, he and his new employer need to apply from scratch.