This happened to me the first year I canned sliced jalapeno's and banana peppers. All that work for nothing! I was so disappointed!
To combat that I stopped using the food processor to slice the peppers, and sliced them by hand a bit thicker. Don't forget to wear gloves! I also cut down the time in the water bath by almost half. Just enough for the lids to pop and seal. Haven't had that problem since.
You can adjust the heat by the amount of ribbing and seeds you leave with the peppers. After one year of leaving all of it (VERY HOT), I remove both the seeds and ribbing about every other pepper. Maybe every third pepper (I like 'em hot).
we always cut them by hand or leave them whole, and never take out the seeds or membranes (sacrilege!!).
i always learned pickling by pouring in the hot brine then leaving the jars to seal on their own during the cool down, but my gf read in some book that some food-borne illnesses are spread this way so we started doing the boil after brine. when it comes time to do canning again this year i may suggest reducing the bath time or skipping the bath on a couple and see how they come out.
"That's the trouble with political jokes in this country... they get elected!" -- Dave Lippman