H4 to H1B and Employer contract

[omkrish]

I got 221g on H1B while in India. I received an email saying that applicant was refused and case was returned to KCC. My employer recived an email that file was returned to USICS for further review. Later Came to US on H4. My question is

1. Can i transfer to a new employer, that is H4 to H1B?

2. I had a contract with my previous employer. But since i am on H4 now, Will that affect my new H1B filing and must i go back and work for previous employer after the USCIS review outcome?