create a dynamic drop down list based on specific criteria

I have a list of employees. Each employee is classified as either "active" or "inactive"

I want to have a dynamic drop down list box which will automatically show all "active" employees.

I know how to create a dynamic range that will accommodate adding new employees, BUT , I need to find a way to have names removed from the list when an existing employee's status is changed to "inactive"

It seems like it should be possible, but I have been unable to find a solution.

Any help would be greatly appreciated.

THX