I had a facebook+coworker problem. I didn't get in trouble, but he was posting on my wall/statuses *way* more than I felt comfortable with. He'd go back through weeks and weeks worth of information and commenting on things that I'd written a month ago. He was a lot older than me, and some of his comments seemed almost *too* friendly, in a way.
Since it was only one, I blocked and said that I'd disabled my Facebook. I felt bad for lying, but I felt a lot more comfortable afterward.
If it's five people or less that you've unfriended, I'd say go ahead and block and claim inactivity.
The problem with the way Facebook is set up now, I haven't found a way to get my profile completely "invisible" to people who aren't my friends. It used to be possible to block out your profile picture so that no one could be 100% sure it was you, make yourself unsearchable, ect. But if you have any mutual friends in common with your co-workers, no matter how many protections you have slammed up, they'll at least know that you *are* still on Facebook, and that you did unfriend them. If you're looking to avoid that confrontation all together, blocking may be the only way to go.
If you're willing to let them know you unfriended, then I'll POD other posters about the "family" line.