I'm not sure what it is you're actually trying to do here. Which cell are you putting that formula in?

Perhaps you could post an example workbook to make things clearer?

Basically it is a workbook for scheduling vacation. for instance for Jan 1st, 5 open slots are available. instead of manualy inputing names I want to use 1 dropdown list with approx. 300 employees. first slot is easy, but for 2nd, 3rd 4th and 5th request I need it to leave current names in cells that are already occupied and input new request into the next vacant cell down.
ex. Jan1, 2013
A1-- Joe
A2-- julie
A3-- (available)
A4-- (available)
A5-- (available)

drop down list will be from seperate sheet